Bull or bear market, it’s undeniable that the ETF universe has grown like a weed. The exchange-traded product lineup is quickly approaching the 1,500 mark; veteran issuers and new entrants alike continue to ramp up developments at a blistering pace despite looming worries over the sluggish global recovery. As innovative, first-to-market ETFs hit the street every week, investors might be wondering how some of the industry’s “old dogs” have held up throughout the ups and downs on Wall Street over the past few years [see also How To Pick The Right ETF Every Time].
As such, below we take a look at five ETFs with noteworthy five-year returns, highlighting three funds with impressive performance track records and two with dismal ones (returns as of July 20, 2012):
5. iShares COMEX Gold Trust (IAU): Up 130%
Nothing shines like gold. This physically-backed ETF offers exposure to the spot price of gold bullion, which has been one of the best performing asset classes over the past decade period. Gold prices have experienced astronomical gains over the past five years as the recent financial crisis sparked a widespread flight to safety. The precious yellow metal has rightfully earned its reputation as a safe haven, capable of holding its ground and even appreciating in times of uncertainty. IAU has amassed just over $9 billion in assets under management since launching in the beginning of 2005 [see also 7 Reasons To Hate Gold As An Investment].
4. Van Eck Market Vectors Biotech ETF (BBH): Up 96%
Considering the 2008 stock market downturn, this ETF has clinched truly impressive gains during an otherwise lackluster period for major equity indexes; by comparison, the SPDR S&P 500 Index (SPY) has been nearly flat over the same time period, incurring a minor loss of roughly 3% [see SPY Performance]. What makes BBH’s track record even more impressive is the fact that it features a shallow, top-heavy portfolio; this ETF holds 25 of the largest U.S. listed, publicly-traded biotech companies, allocating just over two-thirds of total assets to the top ten holdings alone [see also Baby Boomers ETFdb Portfolio].
3. iShares MSCI Malaysia Index Fund (EWM): Up 39%
Emerging markets have been the talk of the town for quite a while now, although this asset class has undeniably fallen victim to rampant volatility at the first sign of economic turmoil. Malaysia’s equity market may be the exception. EWM has a stellar five-year track record considering that the broad MSCI Emerging Markets Index Fund (EEM) boasts a lackluster loss of nearly 11% over the same period. Even the China growth story doesn’t compare; the popular FTSE China 25 Index Fund (FXI) is down 21% over the past five years. From a sector breakdown perspective, EWM is surprisingly dominated by financial services, followed by industrials and communication services.
2. PowerShares WilderHill Clean Energy Portfolio (PBW): Down 81%
The alternative energy sector has been riddled with handfuls of volatility as investments in this corner of the energy market haven’t truly taken off like many have been hoping for. The “green” trend is without a doubt taking root across the globe; however, PBW’s portfolio of holdings has unfortunately failed to gain much traction. This PowerShares ETF has amassed $137 million in assets under management since launching in early 2005 [see also 3 ETFs For Long-Term Energy Trends].
1. United States Natural Gas Fund (UNG): Down 94%
UNG’s five-year chart bears an uncanny resemblance to a steep ski slope: all downhill with the occasional bumps. Natural gas prices have been in a seemingly perpetual decline over the past few years as new fracking technologies have expanded supplies beyond investors’ wildest expectations. Furthermore, this ETP has endured several reverse splits since inception to help quell its downhill performance; the most recent one was a 4-for-1 reverse split on February 22, 2012 [see Energy Bull ETFdb Portfolio].
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Disclosure: No positions at time of writing.