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Here is a list of the 10 equity ETFs with the smallest retracements (as of April 21, 2009) of their declines of the past year. Yesterday I posted the 10 equity ETFs with the largest bounce, which prompted inquires as to what the other end of that ranking looked like.

To make today’s list, I used the same filters:

  • Long-only equity ETFs and ETNs (bond, currency, commodity, asset allocation, leveraged and inverse ETFs are not compared)
  • Only ETFs and ETNs that have been trading for one year

I followed the same process as yesterday, except the final sort was reversed. For reference: I determined the peak and trough of the past year. From there, I calculated the total percentage each ETF would need to gain in order to fully recover back to its one-year peak from its one-year low. This is called the Maximum DrawDown Recovery Factor (MDD-RF in the table below).

Next I calculated the percentage each fund has recaptured as compared to its overall recovery requirements. In other words, I wanted to know how much of a bounce it has actually had so far versus how much it needs for a total recovery. The table shows you the ten ETFs which have bounced the least from their low points.

The utilities sectors has clearly not participated in the recent rally, and biotechnology is on the verge of breaking down to new lows. The alternative energy ETFs, like Claymore/MAC Global Solar Energy (NYSEARCA:TAN), fell so far, that even with its recent 50% rally, it was only able to retrace ~10% of its overall decline.

The table below was generated from the daily closing prices of the last twelve months, and has not been adjusted for dividends. The 22.6% bounce of the SPDR S&P 500 (NYSEARCA:SPY) is included for comparison. SPY has gained +25.8% from its low, which is 22.6% of the 110.0% gain needed for full recovery.

Rank

Ticker

Name

MDD-RF

%Bounce

1

XBI

SPDR S&P Biotech

60.2%

3.7%

2

DBU

WisdomTree Intl Utilities

116.7%

9.1%

3

TAN

Claymore/MAC Global Solar Energy

530.1%

10.5%

4

FVL

First Trust Value Line 100

127.0%

10.6%

5

EWK

iShares MSCI Belgium

272.2%

10.7%

6

FDD

First Trust DJ STOXX Select Dividend 30

271.4%

10.9%

7

GEX

Market Vectors Global Alt Energy

280.1%

11.0%

8

IFEU

iShares FTSE/EPRA NAREIT Europe

290.2%

11.6%

9

ENY

Claymore/SWM Canadian Energy Inc

335.5%

11.7%

10

JXI

iShares S&P Global Utilities

100.0%

11.8%

SPY

SPDR S&P 500

110.0%

22.6%

Disclosure: no positions

Source: Equity ETFs with the Smallest Bounce