Jan 12, 2014
ETF Multi-Asset 100
ETF investors in the top 100 exchange-traded products made +$136 billion in 2013. Actually, they made more than that if you count inflows -- but we calculate the ETFreplay 100 by locking in starting assets as this captures the big themes quite well.
We began the ETFreplay 100 project a year ago to try to show a proxy for how investors are ACTUALLY doing. The fact of the matter is that most people with wealth do not hold just 1 type of investment -- they own a portfolio and that portfolio consists of more than just US Stocks and Bonds. There is no universally accepted benchmark -- nor should there be -- your individual benchmark is dependent on various factors that differ: ie, your age, your risk tolerance, your liquidity needs, your time-horizon etc...
So investors in reality own an allocation of different assets that hopefully corresponds to their profile. What we do with the ETF 100 is aggregate all those by using ETF asset levels and then monitoring that total return performance over time. The $136 billion in profits equates to a +12.7% total return for the year.
Learning to ignore all the noise on financial TV and twitter about INDIVIDUAL investments and instead focusing in your own process is extremely important. Differentiate between what 'sounds good' as a one-liner on TV or a blog vs what actually matters -- your PORTFOLIO total return. In the end, the only question that actually matters is --- did you make progress against your financial goals?
The ETFreplay 100 covers well OVER $1 trillion in assets. US Stocks were the star performers in 2013. Below summarizes the results and the most significant contributors and detractors for the year:
For a side comparison, we compare the results to the most watched hedge fund benchmark:
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Jan 01, 2014
S&P 500 | Total Return
Total return measures capital appreciation AND the return associated with dividends (and any other distributions -- such as capital gains distributions). It is always surprising how many emails we receive saying our numbers are incorrect because people compare the year-end SPY price to the previous year-end. That is INCORRECT. The correct TOTAL RETURN for 2013 for SPY was +32.3%. That is +2.6% higher than the price return. For ETF's with higher yields -- (and/or for those with cap gains distributions) -- this difference will be higher.
Over a few years, this difference really adds up to be a substantial amount.
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