This Day On The Street
Continue to site
ADVERTISEMENT
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

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

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

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

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
VUG $109.30 0.73%
VTV $83.36 0.71%
IBM $159.53 0.29%
VLO $64.68 0.47%
AAPL $123.22 0.37%

Markets

Chart of I:DJI
DOW 17,558.84 +118.25 0.68%
S&P 500 2,081.32 +13.68 0.66%
NASDAQ 5,057.6680 +17.8920 0.36%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs