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By Matthew Hougan

What's the best U.S. total market ETF?

If you're looking at January performance, the answer is clear: the ELEMENTS Benjamin Graham Total Market ETN (BVT).

And not just by a little. BVT posted a positive 6.44% return in January, outpacing the next closest competitor (the iShares Russell 3000 Growth ETF, IWZ) by more than 11%.

I'm unable to find real-time data on what stocks the Elements ETN tracks and how it achieved its remarkable performance. But even if you look past BVT, you can see that the spread of performance for the various total market ETFs is significant.

Name

Ticker

Expense Ratio

Assets ($US millions)

January 2009

2008

2007

Elements BG Total Market

BVT

0.75%

2.4

6.44

N/A

N/A

iShares Russell 3000 Growth

IWZ

0.25%

335.7

-5.06

-38.62

11.02

Vanguard Total Stock Market

VTI

0.07%

8,443.3

-8.05

-36.68

5.37

SPDR Total Market (DJW 5000)

TMW

0.20%

129.3

-8.18

-36.68

5.22

iShares Russell 3000

IWV

0.20%

2663.6

-8.37

-37.14

4.57

iShares DJ US Index

IYY

0.20%

460.7

-8.46

-37.06

5.78

iShares S&P 1500 Index

ISI

0.20%

260.3

-8.89

-36.47

4.50

iShares Russell 3000 Value

IWW

0.25%

316.3

-11.56

-36.00

-1.38

This raises an absolutely critical point: the choice of ETFs matter. And once you move beyond total market funds into more specific styles or sectors, the choice of ETFs matters even more.

The table below compares the January returns of the top and bottom performing ETFs for each of the 11 size/style boxes. The variance in one-month returns ranges from 3.95% (for Mid-Cap Growth ETFs) to 28.09% (for Small-Cap Value ETFs). In half of the categories, at least one ETF delivered a positive return, which is impressive when you consider that January was the worst month for U.S. equities in history.

Asset Class

Fund

Ticker

Return

Difference

Total Market

ELEMENTS BG

BVT

6.44%

18.00%

iShares Russell 3000 Value

IWM

-11.56%

Large Cap

SPA MarketGrader LC

SZG

1.49%

11.70%

PowerShares FTSE RAFI 1000

PRF

-10.21%

Large Cap Growth

Clymr/Ocean Tomo Growth

OTR

1.05%

13.10%

Vanguard Mega 300 Growth

MGV

-12.05%

Large Cap Value

Vanguard Mega 300 Value

MGK

-4.89%

11.55%

Rydex S&P 500 Pure Value

RPV

-16.44%

Mid Cap

SPA MarketGrader 200

SNB

1.17%

10.54%

Claymore/Sabrient Insider

NFO

-9.37%

Mid Cap Growth

SPDR DJ MidGrowth

EMG

-3.66%

3.95%

First Trust IPOX-100

FPX

-7.61%

Mid Cap Value

Claymore/Clear Spinoff

CSD

-4.07%

11.64%

Rydex S&P 400 Pure Value

RFV

-15.71%

Small Cap

SPA MarketGrader Sm100

SSK

-5.24%

8.86%

RevenueShares SmallCap

RWJ

-14.10%

Small Cap Growth

Pshares NASDAQ NextQ

PNXQ

-1.31%

9.21%

Rydex S&P 600 Pure Growth

RZG

-10.52%

Small Cap Value

ELEMENTS BG Small

BSC

5.87%

28.09%

Rydex S&P 600 Pure Value

RZV

-22.22%

Micro Cap

Claymore/Sabrient Stealth

STH

-7.76%

8.40%

FT DJ Sel MicroCap

FDM

-16.16%

The same is true if you look at individual sectors. Looking at the eleven core sectors, the difference between the top and bottom performing funds ranges from 1.79% (for Telecom funds) to a stunning 25.89% (for Financial ETFs) ... an incredible result in a single month.

Asset Class

Fund

Ticker

Return

Difference

Basic Materials

Vanguard Materials

VAW

-7.38%

6.38%

First Trust Material Alpha

FXZ

-13.76%

Consumer Goods

Rydex S&P EW Cons. Stp.

RHS

-0.53%

17.15%

Claymore/Robb Global Lux

ROB

-17.68%

Consumer Services

PowerShares Media

PBS

-3.32%

9.36%

Rydex S&P EW Cons. Disc.

RCD

-12.68%

Energy

SPDR Oil&Gas Equip&Serv

XES

2.57%

10.15%

PowerShares WH Progr Ener

PUW

-7.58%

Financial

iShares DJ Broker Dealer

IAI

-9.23%

25.89%

SPDR KBW Bank

KBE

-35.12%

Healthcare

iShares DJ US Medical Dev.

IHI

3.40%

8.24%

PowerShares Pharma

PJP

-4.84%

Industrial

iShares DJ Aerospace

ITA

-2.76%

14.03%

iShares DJ Transports

IYT

-16.79%

Natural Resources

Market Vectors Gold Miners

GDX

1.03%

13.05%

PowerShares Water Res.

PHO

-12.02%

Technology

iShares GS Networking

IGN

0.77%

10.21%

PowerShares Lux Nanotech

PXN

-9.44%

Telecom

PowerShares FTSE RAFI Tel

PRFQ

-6.02%

1.79%

PowerShares Tele & Wireless

PTE

-7.81%

Utilities

Sel. Sector Utilities

XLU

0.17%

3.67%

First Trust Util AlphaDex

FXU

-3.50%

With 800 ETFs on the market, it's not enough just to have an opinion about a particular sector or to want to tilt to a particular size or style. It's critical to evaluate each of the ETFs within a given asset class and find the one that most closely reflects your full views on the market.

Source: What’s the Best U.S. Total Market ETF? Style? Sector?