ETFs Are Up For The Most Part

This is a copy of a blog I wrote a week ago and am republishing because it was removed by a technical issue.

This is my second weekly blog about ETFs. Last week, I discussed how stocks are acting differently, and they still are.

A Look at the Market

Most people measure U.S. stocks by looking at the performance of the Standard & Poor's 500, and it is down slightly in 2026 so far after increasing 26.3% in 2023 (including dividends), 25.0% in 2024 and then 17.9% in 2025. It fell 18.1% in 2022 after rallying 28.7% in 2021. Of course, this is after a plunge and dramatic reversal in 2020 following the pandemic hitting. Since the end of 2016, which was when Donald Trump was first elected President but before his term started, the S&P 500 has soared. Going back a full decade, the S&P 500 has returned a stunning 335%.

It is interesting that the S&P 500 is not off to the races. Looking at its 11 sectors, it is very apparent why: The very largest sectors are declining, while small sectors are soaring. Vanguard S&P 500 (VOO), a very large ETF for the S&P 500, shared a Fact Sheet at the end of the year that shows the sector exposures:

The largest sectors have all experienced negative total returns, with Technology down 3.1%, Financials down 5.7%, Communications Services down 2.7%, and Consumer Discretionary down 2.7%. That is 68.8% of the S&P 500 by market-cap weight that has declined. There have been three double-digit gainers (Energy, Consumer Staples and Industrials), but they represented just 15.7% of the index at year-end.

Beyond a wide dispersion in the returns by sector, "Value" has been beating "Growth" by a lot. Two big index ETFs that I follow are the iShares S&P 500 Growth ETF (IVW) and the iShares S&P 500 Value ETF (IVE). IVW has returned -3.5%, while IVE is up 3.9%.

A third big driver has been the size of the stock. Just looking at the S&P indices, ther returns have been remarkably different. The S&P 500 has returned a little bit below zero, while the S&P Mid-Cap 400 has gained 7.9%. The S&P Small-Cap 600 has returned 8.8%. Another popular way to track Small-Caps is the Russell 2000, and it is up 6.8%. The S&P 100 Index, which is the 100 largest stocks in the S&P 500, has returned -2.8%.

So, stocks are acting kind of strangely this year so far. After soaring for the past three years, led by the Magnificent 7, stocks are stuck in the mud, with all of the Magnificent 7 stocks down so far by at least 2%. Smaller stocks, which have lagged badly for the past few years, are doing very well.

Bonds, as measured by the Aggregate Bond Index, are doing better than stocks, returning 1.44%. Looking at the Treasury yield curve, Treasury yields have declined.

ETF Coverage Update

I added an ETF to my Watch List that now totals 83. I added iShares MSCI USA Equal Weighted ETF (EUSA). The ETFs cover stocks, bonds and some commodities, and they range is size from $673 million to $858 billion. They are all passive, meaning that they try to replicate an index. The providers include Invesco, ishares, PIMCO, ProShares, Schwab, State Street, VanEck and Vanguard .My goal is to cover the biggest and the best.

ETF Model Portfolio Update

I launched a model portfolio at the end of the year. This first one aims to beat a balanced index (60% SPY and 40% AGG). So far, it is doing much better, though the year is very early. The total return has been 5.55% compared to the index return of 0.56%. I did a few trades this week, and the ETF is now 41.1% equity and 58.9% fixed-income. The equity is in three ETFs, one of which has high small-cap exposure, and the fixed-income has heavy exposure to TIPS.

I did write a few articles this week, at TalkMarkets and at Seeking Alpha.The ones at TalkMarkets were:

• Don't Buy This Dip

• Why I Bit At IBIT

At Seeking Alpha, I published these:

• VanEck Gold Miners ETF Appears To Have Peaked

• VXF Is A Good ETF For Diversification

How Can I Help You?

I enjoy analyzing ETFs and stocks, and I like sharing my thinking in writing. I am working on starting a subscription service at Seeking Alpha. What things would you as an investor like to see offered?

If you are an investment professional, I would like to work with you as well. I can help educate financial consultants about the ETFs, and I can work with management at investment firms to help create model portfolios or potential ETF investments. Please let me know if your firm would be interested in this.