For all that we have seen from the US equity market, which to date has been general strength in 2011, we have not seen new highs from the primary benchmark US equity index, the S&P 500 Index (SPX), since mid-February.  We have, of course, seen many areas of the US equity market find new highs, but we've not yet seen the S&P return to its February peak around 1,340.  While this is a disappointment for large cap investors who have watched Small Cap and Mid Cap Indexes exceed their February highs, it is surely more poignant that in doing so many of those indices and funds have achieved all-time highs; fully recouping all that the bear market of 2007-2009 inflicted.  One example from the large cap universe is the SPDR S&P 500 ETF Trust (SPY), which has not exceeded its February highs and one that remain well beneath its all-time highs of 156.  On the other hand, the Russell Midcap Growth Fund (IWP) broke to $63, and this was the first print at that level in the fund's history, creating a very notable positive divergence when compared to the primary US equity benchmark index fund (SPY).

In a review of all US-listed "market-based" ETFs we find that many funds have managed new highs thus far in April, surpassing the development thus far seen in the S&P 500, but that among large cap funds that have recently hit new highs, very few are all-time highs.  For instance, over 40% of Large cap funds hit new 52 week highs in April while less than 10% hit new all time highs.  Comparatively, close to 90% of Mid and Small Cap funds hit new 52 week highs in April, and around 40% of Mid and Small Cap funds established new all-time highs in the process.  While strength has been experienced among large cap US equity funds, far more has been observed among those funds operating in the Small and Mid cap space, which have largely erased all of their bear market losses.

When we examine the Broad Economic Sector ETF space, we also find that some sectors have more readily exhibited those long-term positive divergences, while others done so more stubbornly; or not at all.  On a percentage basis, more than 90% of Consumer Noncyclical and Healthcare sectors reached new 52 week highs in April.  Almost 40% of the new 52 week highs in the Consumer Noncylical sector in fact hit new all time highs, and more than half of the Health Care sector funds were able to make new all time highs.  The Industrial grouping of funds have produced new 52 week highs this month in prolific fashion, but less than 10% have surpassed all-time highs.  Similarly, while more than 50% of Energy funds made new 52 week highs, yet less than 10% made new all time highs due to the fact that most continue to trade below their 2008 highs.  Overall, 7 out of the 10 broad economic sectors saw at least half of their ETFs hit new 52 week highs, illustrating the opportunity that has remained present for sector rotation strategies to offer strong alternatives to the more traditional benchmarks such as the S&P 500.