ETF Snapshot: US Stocks Relative Strength

It has been echoed throughout this year that US stocks are "the only game in town," and the chart below provides a strong visual supporting that statement.  Aside from the five or so months that real estate (VNQ) performed relatively better, US stocks (VTI) have outdone the other major asset classes this year.
 
The chart above shows four lines depicting the relative strength of major asset classes versus US stocks: international stocks (ACWX/VTI), bonds (AGG/VTI), real estate (VNQ/VTI), and commodities (GSG/VTI).  An increasing line means that the asset class is performing better relative to US stocks and vice versa.
 
So, if US stocks are leading the parade this year, what areas of our domestic market are driving this global outperformance?
 
 
Looking at the table above, we can see that the NASDAQ (QQQ) is the best performing major domestic index this year.  Then as we dig deeper looking at the style boxes, we find mid caps leading the parade with mid cap growth (IJK) in first place for the year, followed by mid cap core (IJH) and mid cap value (IJJ).  Moving to the sectors, we see that Financials (XLF) and Consumer Discretion (XLY) are the top dogs in 2012, followed by Healthcare (XLV).
 
As we approach the end of the year, the question now becomes, "Will the recent winners continue to lead or will there be a changing of the guard as the markets evolve?"
 
Justin Wood
 
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