![]() Understanding why is as simple as looking at the top constituents of the index. You need a strong character to not lose hope after such a disastrous performance. This means 100 000 invested at the peak, was only worth 17 000 two years later. The max drawdown during this period was a hefty 83 in late 2002. The Consumer Staples sector owes its strong past performance to two wonderful characteristics, consistent demand and pricing power. In depth view into SPY Max Drawdown (3Y) including historical data from 1993, charts and stats. The drawdown didn’t end until 2015 15 years is a pretty long time to wait for a drawdown to recover. It was developed by State Street Global Advisors, a leading asset management company, and was first introduced on the market on January 22, 1993. As a result, investors are asking “what’s different this time?” Of course there is no “answer” but we do have a theory and it centers largely on inflation expectations.īefore diving into that we need to back up and provide a little context. SPY, also known as the SPDR S&P 500 ETF, is a passive exchange-traded fund that tracks the performance of the S&P 500 Index. The maximum drawdown since January 2010 for the S&P 500 Portfolio is 55.19, recorded on Mar 9, 2009. It shows a reduction in portfolio value from its maximum due to a series of losing trades. A maximum drawdown is an indicator of risk. Year-to-date, through the close on, the sector and the S&P 500 both experienced a drawdown, with Consumer Staples underperforming the index by over 4%. The table below shows the maximum drawdowns of the S&P 500 Portfolio. Numbers 3-5: The Managed Portfolios Neither of the above portfolios is lazy. The sector also held up well during the more recent market drawdowns in 2011, 2015, and 2016, but this hasn’t been the case so far in 2018. This portfolio saw an annualized total return of 18.3 and a maximum drawdown of -26.2 over the last fifteen years. This reputation is well deserved-during the 10 years starting and ending the Consumer Staples sector outperformed the S&P 500® Index by roughly 1.5% annualized with a maximum drawdown of 27.4%, compared to 48.4% for the S&P 500. ![]() ![]() In the past, the Consumer Staples sector has had a reputation for providing investors with the best of both worlds: market-like returns and defensive characteristics. In depth view into SPY Max Drawdown (3Y) including historical data from 1993, charts and stats. Maximum Drawdown: a drawdown refers to the decline in value from a relative peak value to a relative trough. The enthusiasm for energy stocks was not unlike today’s enthusiasm for the technology sector.By Denis Rezendes, Beaumont Capital Management Sortino Ratio: another measure of risk-adjusted performance of the ETF.Its a modification of the Sharpe Ratio (same formula but the denominator is the ETF downside standard deviation). Those were the days where the most in-demand college degree was said to be petroleum engineer, the Colorado School of Mines was the institution that turned out the best-paid graduates, and North Dakota was the golden destination for workers in search of high-paying jobs. Investors may want to remember, for example, that the ETF that tracks the energy sector (XLE) had a far more impressive performance in the 2004-2006 period, with a total return of 127%, which was four and a half times the S&P 500. If the market turns around, having additional exposure to XLK is very likely to cause larger-than-market losses. Click and drag in the plot area or select dates: 5 Years 10 Years 20 Years 30 Years All Years. This is understandable as the 3-year total return of XLK (2017-2019) was a stunning 114%, well above twice the S&P 500. This chart compares the S&P 500 index to the Federal Funds Rate back to 1955. The model shows an annualized return of 17.4 (XLY produced 9.3) and a maximum drawdown of -48 (-59 for XLY). This is important because the stellar performance of the tech sector is attracting many investors in search of a boost to their portfolios. Max Drawdown (Since Inception) Range, Past 5 Years. Intra-year Drawdown By Year Calculated using the closing price of the previous year to the lowest S&P 500 price observed during the current year. ![]() It measures the largest single drop from peak to bottom in the value of a portfolio before a new peak is achieved. than the broad market, as tracked by SPY (the S&P 500 ETF). Max drawdown is an indicator of the risk of a portfolio chosen based on a certain strategy. The technology sector, as tracked by an ETF (XLK) typically has far deeper declines in downturns. ![]()
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