Safe Haven ETFs Suffer Less from Massive Job Losses

The unexpected acceleration of job losses sent the broader U.S. market down by more than 2%... right out of the gate. Moreover, the growth sector ETFs experienced the sharpest smackdowns.

The consumer discretionary barometer, SPDR Retail (XRT), was down -4.2% by mid-trading-day 7/2/09. Similarly, SPDR Homebuilders (XHB) felt a painful -3.7% sting.

Meanwhile, there was very little love for SPDR Select Energy (XLE) with a -3.5% pullback. A closer cousin, iShares GS Natural Resources (IGE), plummeted -3.0%.

It's hard to envision a scenario where resources don't find there way back to the heart of investor desire. On the other hand, record savings rates, rising unemployment and 7-month lows on mortgage applications may put the kibosh on middle class spending for homes, cars, appliances, furniture, clothing and so forth.

Then there are the go-to safety spots like Consumer Staples (XLP) with a -1.0% loss mid-day. Consumer "must-have" goods from the General Mills (GIS) or Procter & Gambles of the world can continue to prosper in this environment. Of course, Vanguard Health Care (VHT) was also down less than other sectors, but health care reform legislation seems to keep VHT from significant upward momentum.

There was a pre-holiday sub-sector surprise in the form of a broad market sell-off. Specifically, iShares GS Semiconductors (IGW) and SPDR Semiconductors (XSD) were down -1% and -1.5% respectively.

While the broader market has essentially flat-lined for the months of May and June, garnering most of its recovery gains in March and April, semiconductor ETFs have continued their impressive ascent. It doesn't hurt when a fund loses less on the down days... since it'll require less on the up days to come out a winner.

Full Disclosure: Gary Gordon, MS, CFP is the president of Pacific Park Financial, Inc., a Registered Investment Adviser with the SEC. The company may hold positions in the ETFs, mutual funds and/or index funds mentioned above.