Equity ETFs with the Smallest Bounce

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 (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 (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