Wednesday, January 18

Worst Performing ETF's Of 2005

For those of you who are contrarian by nature, you may be interested in the worst 10 performers of 2005. Many of these areas showed life in the first week of 2006.

Internet Infrastructure Holdrs - IIH (15.80%)
B2B Internet HOLDRS - BHH (10.88%)
Telecom HOLDRS - TTH (9.63%)
Internet HOLDRS - HHH (7.68%)
Internet Architecture HOLDRS - IAH (6.98%)
iShares:S&P Global Telecom - IXP (6.72%)
Consumer Discretionary SPDR - XLY (6.57%)
iShares Goldman Sachs Software Index - IGV (5.53%)
Vanguard Consumer Discretionary VIPERs - VCR (4.10%)
Pharmaceutical HOLDRS - PPH (3.71%)

The worst performing ETFs of 2005 are dominated by Merrill Lynch Technology Holdrs, Telecom, Big Pharma and Large Cap Growth.

The Best ETFs Of 2005

According to the end of the year data provided by Yahoo Finance, here is a list of the top 10 performing etf's for 2005.


iShares S&P Latin America 40 Index - ILF 54.59%
iShares MSCI South Korea Index - EWY 53.90%
iShares MSCI Brazil (Free) Index - EWZ 52.66%
iShares MSCI Mexico (Free) Index - EWW 43.82%
BLDRS Emerging Markets 50 ADR Index ADRE 40.80%
Energy Select Sector SPDR - XLE 40.17%
Vanguard Energy VIPERs - VDE 39.05%
iShares Goldman Sachs Natural Res. - IGE 35.98%
iShares Dow Jones US Energy - IYE 34.67%
iShares MSCI Emerg Mkts Index - EEM 32.62%


You can see a very clear pattern of Emerging Markets and Natural Resources (led by the energy complex). The Biotech Holdr BBH also had a good year posting a 31.29% gain and the rally in gold to 20 year highs led the streetTRACKS Gold Trust GLD to a 17.76% gain for the year.

Wednesday, January 4

Hot hand ETF for the new year

By Jim Lowell
Last Updated: 1/3/2006 12:01:00 AM


"WATERTOWN, Mass. (MarketWatch) -- Unveiling of my Hot Hands ETF is now officially an annual event.
And, if you followed the Hot Hands for 2005, it would have been a profitable event: last year's Hot Hands ETF was the iShares S&P Latin American 40 - and it gained 54.5% in 2005, thank you very much.

What's a Hot Hands ETF you ask? Easy. Last year, I introduced a simple and straightforward way to invest in exchange-traded funds: buy last year's best performing one. At the start of each and every New Year, buying the prior year's top-performing ETF turns out to be a stellar strategy. See column from a year ago.

No way?

The rewards, as demonstrated since January 2001 (when there were enough ETFs in existence to start tracking this strategy), puts performance posers in their place -- and it doesn't cost an arm and a leg to sidle up to the bar of year-end results and spit in the eye of the nearest high priced hedge fund.

But before I get to the strategy's details, and before I count down to my Hot Hand ETF For 2006, let me throw what will now be my annual monkey wrench into this particular financial engine.

While this strategy does reveal a healthy trend, the data only goes back five years; hardly long term. Yes, of course, past performance doesn't guarantee that the sun will rise tomorrow, but it also doesn't mean that you shouldn't set the alarm clock. Further, I do not advocate sinking your entire investment kit and caboodle into one of anything -- ever. That would foolishly fly against the diversified investment approach that I practice and preach personally and professionally. So, be forewarned: this isn't meant to be an all-or-nothing strategy. But it could be a complementary one.


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