Volatility has rocked U.S. stocks, so we decided to check in on the U.S. stock funds in the Kiplinger ETF 20. Most performed in line with expectations, but some investors may find one outcome surprising.
First, a little context. After peaking in February, the S&P 500 Index plunged 19% before recovering some in early April.
By the end of April, the index was down 9% from its peak on February 19. The 11 U.S. stock funds in the Kip ETF 20 – our favorite exchange-traded funds – performed in line with the benchmark with an average loss of 9%.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
A focus on dividends and quality helped. The Schwab U.S. Dividend Equity ETF (SCHD) and the Vanguard Dividend Appreciation ETF (VIG) held up best, declining 7.5% and 6.4%, respectively, through April from the market peak.
The JPMorgan U.S. Quality Factor ETF (JQUA) was not far behind, with a 7.3% loss. It focuses on stocks that pass certain quality and profitability measures.
Funds that emphasize smaller companies and tech stocks fared worse. The iShares Core S&P Mid-Cap ETF (IJH) and the iShares Core S&P Small-Cap ETF (IJR) lost 10.8% and 14.3%, respectively.
Nipping at their heels were the Technology Select Sector SPDR ETF (XLK), which holds 65 information technology stocks, with a 13.0% loss, and the SPDR S&P Kensho New Economies Composite ETF (KOMP), which declined 13.6%. Tech stocks make up 35% of that portfolio, which focuses on innovative companies.
But one fund turned its fortunes around. After lagging the S&P 500 for much of the past decade, the Invesco S&P 500 Equal Weight ETF (RSP) weathered the swoon far better than any other U.S. stock fund in the Kip ETF 20, with a 7.0% loss.
The fund holds shares in every member of the S&P 500 in equal proportions, rather than weighting them by market value. That approach helped to lessen the impact of losses in some of the biggest S&P 500 firms, including Tesla (TSLA), Nvidia (NVDA) and Apple (AAPL).
Meanwhile, the equal-weighting enhanced the impact of gains in smaller companies in the index, including software company Palantir Technologies (PLTR), CVS Health (CVS) and goldmining company Newmont (NEM).
This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.
Related Content
-
Don’t Miss Apple and Walmart Back-to-School Tax-Free Holiday Savings this SummerSales Tax Select states host sales tax holidays during the summer; here’s what you can purchase.
-
The Rule of Retirement InversionThe rule of retirement inversion says that to have a great retirement, you must ask yourself what would ruin a great retirement — and then plan to avoid it.
-
How Divorced Retirees Can Maximize Their Social Security Benefits: A Case StudySusan discovered several years after she filed for Social Security that she is eligible to receive benefits based on her ex-spouse's earnings record. This case study explains how her new benefits are calculated and what her steps are to claim some of the money she missed.
-
From Piggy Banks to Portfolios: A Financial Planner's Guide to Talking to Your Kids About Money at Every AgeFrom toddlers to young adults, all kids can benefit from open conversations with their parents about spending and saving. Here's what to talk about — and when.
-
I'm an Investment Pro: Here's How Alternatives Could Inject Stability and Growth Into Your PortfolioAlternative investments can often avoid the impact of volatility, counterbalancing the ups and downs of stocks and bonds during times of market stress.
-
Dow Bleeds Red Due to Big Blue: Stock Market TodaySix of the official GICS sectors were in the green, led by communications services, technology and energy stocks.
-
July Fed Meeting: Live Updates and CommentaryThe July Fed meeting could be a lively economic event, with Wall Street keyed into what Fed Chair Powell has to say about interest rates and President Trump.
-
A Contrarian Approach Pays Off for This Small-Cap FundSmall-cap stocks have been hit hard by tariff worries, but this T. Rowe Price fund has outperformed thanks to its manager's against-the-tide approach.
-
A Financial Planner's Guide to Unlocking the Power of a 529 Plan529 plans are still the gold standard for saving for college, especially for affluent families, though they are most effective when combined with other financial tools for a comprehensive strategy.
-
An Investment Strategist Takes a Practical Look at Alternative InvestmentsAlternatives can play an important role in a portfolio by offering different exposures and goals, but investors should carefully consider their complexity, costs, taxes and liquidity. Here's an alts primer.
