Indexor

Six Month Correlation Among iShares ETFs

Richard:

Thanks for the data, as the last 6-month time frame has changed many of these correlations considerably. Apparently, several readers are either new to investing and not familiar with correlation tables, or simply feel it is their job to complain. In any event, I appreciate your efforts in this post and the many others you have provided here.

700 ETFs and Counting: A Bird's-eye View

As someone who began using iShare ETFs back in 1996 when they were known as WEBS, and was finally able to drop all open-end mutual funds and closed-end funds last year in order to build 100% ETF portfolios, I applaud your article for providing a good macro view of the landscape.

After BGI rebranded WEBS to iShares with a focus on US stock ETFs in 2000, it wasn't very long ago that it seemed to take absolutely forever to get SHY, ICF and EFA through the approval process of the SEC in 2001. More government bonds appeared in 2002 followed by EEM, TIP and AGG in '03, GLD in '04, MicroCap and EAFE Growth and Value in '05, Commodities and Short/Leveraged ETFs in '06 and finally Currencies and the missing bond categories of High Yield, Muni and Internationals in '07.

As Actively Managed ETFs hit the market in '08, it is logical to believe that many more open-end mutual fund companies will stop feeling threatened and join the movement as Vanguard and Van Eck have already done. Lower expense ratios (look at the market share Vanguard is taking), real transparency (as opposed to quarterly window dressing), intra-day trading (no more bashing of market timing or additional fees for selling whenever you want) and better tax treatment which can be managed as opposed to the ridiculous IRS-forced capital gain distributions at year end.

Good article.