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With more than 1,400 exchange-traded products now available to U.S. investors, odds are that there will be more than one option for most desired exposures. In many cases, the generally similar products targeting a specific asset class or strategy will deliver generally similar returns. But just because two ETFs have names that sound alike or even feature some overlap of holdings, they aren’t always guaranteed to display identical performances. The devil is in the details, and in many cases the nuances of exchange-traded products can result in very different risk / return profiles [see For ETF Investors, The Details Matter].

Below we profile seven head-to-head comparisons of ETFs that may generally appear to be similar. In reality, however, the returns delivered by these products have not been nearly as similar as some might suspect, highlighting the importance of analyzing the nuances of potential ETF investments.

WisdomTree Dividend Ex-Financials Fund (DTN) / S&P 500 SPDR (SPY)

What a difference a sector makes. The big delta between DTN and SPY illustrates that sometimes the biggest drivers of performance are not what a portfolio includes, but what it avoids. The WisdomTree ETF offers exposure to large cap U.S. stocks, but avoids the financial sector entirely and uses dividends to determine allocations to individual securities [see Financials Free ETFdb Portfolio]. Those distinguishing features have translated into impressive performances recently.

Gold SPDR (GLD) /Market Vectors Gold Miners ETF (GDX)

Gold has climbed quite a bit higher over the past year, thriving as a safe haven and alternative hard currency. Unfortunately for many, the surge in gold prices hasn’t translated into increasing profitability for the companies that get the precious metal out of the ground; gold mining stocks have slumped, with GDX trailing behind the physically-backed GLD by about 40% since the start of 2011 [see Five Things We Learned At Inside ETFs].

United States Natural Gas Fund (UNG) / United States 12 Month Natural Gas Fund (UNL)

These two products have a lot in common; both are offered by United States Commodity Funds, and both hold natural gas futures contracts. The difference is the nature of the underlying futures contracts; UNG holds primarily short-dated contracts while UNL spreads out its holdings across 12 months [see 25 Ways To Invest In Natural Gas]. This seemingly minor difference can have a significant impact on performance; UNL has done much better over the past 13 months, thanks in large part to the lower turnover in the underlying portfolio and moderate contango further out on the maturity spectrum.

S&P 500 VIX Short-Term Futures ETN (VXX) / S&P 500 VIX Mid-Term Futures ETN (VXZ)

Volatility has become a popular asset class thanks to innovation that has made this strategy available through the exchange-traded structure. Effective as a form of “portfolio insurance” that performs well when stocks struggle, VIX futures can be useful ways to bet against risky assets or as hedging tools related to more advanced strategies. The comparison between VXX and VXZ demonstrates the importance of duration; both ETNs are linked to indexes comprised of VIX futures, but the performance has obviously been very different. VXX, which holds short term futures, tends to show significantly more volatility than VXZ, whose holdings consist of mid-term VIX futures contracts.

Alerian MLP ETF (AMLP) / E-TRACS Alerian MLP Infrastructure Index ETN (MLPI)

This comparison illustrates how significant the choice of product structure can be in certain asset classes; both of these products seek to replicate the Alerian MLP Infrastructure Index, a benchmark that includes several MLPs. But AMLP is an ETF, while MLPI is an ETN. Due to some nuances surrounding these structures, the ETN has maintained a significant advantage recently, as MLPs have performed relatively well. Since the beginning of 2010, MLPI has beaten AMLP by about 10%.

GSCI Commodity Indexed Trust Fund (GSG) / S&P GSC Total Return Index ETN (GSP)

This head-to-head comparison further illustrates the fact that the choice of structure can have an impact on bottom line returns. GSG and GSP are both linked to the S&P GSCI Total Return Index, a benchmark that consists of futures contracts on various commodities. But while GSG is an ETF from iShares, GSP is an ETN that avoids tracking error and commissions. Those differences have contributed to a performance edge for the exchange-traded note; the ETN has beaten its ETF counterpart by about 180 basis points since the beginning of last year.

EGShares Small Cap India ETF (SCIN) / iShares India Nifty Fifty Index Fund (INDY)

Like many of the pairs of ETFs highlighted above, SCIN and INDY have a lot in common. Specifically, both offer exposure to Indian stocks. But while INDU focuses on the largest 50 Indian companies, SCIN targets stocks of much smaller companies. Though focusing on the same market, SCIN and INDY have no direct overlaps. Many investors now view small cap stocks as a better “pure play” on the local economy; whereas INDY holds companies that derive revenues from several markets outside India, SCIN’s components are more directly dependent on local consumption.

Though neither of these India ETFs have performed well over the last 13 months, both have done quite well so far in 2012. Again, the performance gap between the two is significant; through February 17 SCIN had gained about 47% on the year compared to a gain of about 31% for INDY.

Disclosure: Long SCIN, MLPI.

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Source: 7 Surprising ETF Performance Comparisons