This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Large-Cap ETFs Weather Stock Slump

Large-cap ETFs are becoming more attractive by the day.

The topsy-turvy conditions of the S&P 500 have pushed the CBOE Volatility Index up by 21% in the past month as investors brace for a tough road ahead. This uptick in volatility is providing a strong case to take cover in large-company shares, which are at the heart of well-balanced portfolios built to hold up in stormy weather.

Adriana Posada, a portfolio manager of the American Beacon Large Cap Value Fund (AAGPX), stresses the importance large-cap equities. "They should be the bedrock of an individual investor's portfolio because they tend to be less volatile," she said.

Posada notes that an ETF or mutual fund can prove to be a cost-effective method to obtaining large-cap exposure. "Buying a basket of stocks is a very good option," she said. "It can be difficult for an individual investor to build a diverse portfolio if they do not have a high net worth."

Large-cap ETFs such as the iShares S&P 500 Index (IVV) and the PowerShares QQQ Trust (QQQQ), which track the S&P 500 and the Nasdaq 100 Index, respectively, have had a rough go so far in 2008. These funds are down 14.4% and 15.0%, respectively. Last year, they rose 3.3% and 17.9%.

Large-cap ETFs that subscribe to a particular investing style have not fared any better. For instance, the Vanguard Growth ETF (VUG), a fund comprised predominantly of large-cap names such as Microsoft (MSFT), Apple (AAPL) and Google (GOOG), has declined 13% year-to-date. The picture for value has been equally sluggish. The Vanguard Value ETF (VTV), which holds names such as ExxonMobil (XOM), Chevron (CVX) and Pfizer (PFE), has slid 16%.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs