Don Dion's Weekly ETF Blog Wrap

Editor's note: Don Dion posts his current insights on the stock, bond, commodity and currency markets in his RealMoney blog , anticipating which ETFs will be in play next. Among his posts this week were the following entries about infrastructure ETFs, a nickel ETN and ways to play Apple.

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This Town's Big Enough for Two Infra ETFs

Posted 6/23/2009 12:00 p.m. EDT

The iShares S&P Emerging Markets Infrastructure Index Fund(EMIF Quote) began trading Friday on the New York Stock Exchange. EMIF represents iShares' recent grab at the bullish infrastructure market, specifically focusing on larger emerging markets. In fact, about 90% of the fund is contained within a core cluster of seven countries. China represents one-third of EMIF's assets, while Brazil, Argentina and South Korea collectively make up another third. Malaysia, Chile and the Czech Republic account for a majority of the remaining shares, with the last 10% representing a wide variety of smaller emerging countries.

Furthermore, as would be expected by an infrastructure-based ETF, EMIF is noticeably tech-heavy; almost exactly 80% of its shares are linked to three central tech-related sectors. Specifically, the fund has a 33.65% holding devoted to the Transportation Infrastructure sector, with 26.27% invested in the Electric Utilities sector and 20.10% corresponding to the Energy Equipment & Services sector.

Meanwhile, EMIF has developed something of a negative reputation. In response to its emergence, many critics have merely portrayed the fund as iShares' competitive response to an existing infrastructure ETF -- the PowerShares Emerging Markets Infrastructure Portfolio (PXR Quote), which came into play in October 2008. However, an astute analyst is quick to point out that while both ETFs deal with the overarching market of "infrastructure," the two funds are nonetheless radically different. Specifically, PXR tends to centralize its holdings around construction-oriented companies, while EMIF is designed to target securities that deal with the maintenance and operation of infrastructure.

Therefore, PXR's securities may seem the better short-term investment, given the simple logic that construction precedes maintenance. However, operation and maintenance are persistent needs, which may establish EMIF as the more lucrative long-term decision. At any rate, keep an eye on these two infrastructural ETFs in the coming months as global stimulus dollars are put to work.

1 What would best describe your stance heading into the coming week of trading? Bullish Bearish Neutral 2 Which of these sectors do you think is set to move up in the coming week? --Choose One--Aerospace and DefenseAirlinesAutomobilesBeverages and Food ProductsBiotechnologyCommercial BanksComputers and PeripheralsConsumer NondurablesEnergy Equipment & ServicesHMOs and HospitalsHomebuildingInsuranceIntegrated OilInternet, Software ServicesInvestment Bankers and BrokersMediaMultiline RetailPharmaceuticalsPrecious MetalsSemis, Semi EquipmentTelecom EquipmentTobacco and AlcoholWireless CommunicationsUtilities 3 Which of these sectors do you think is set to move down in the coming week? --Choose One--Aerospace and DefenseAirlinesAutomobilesBeverages and Food ProductsBiotechnologyCommercial BanksComputers and PeripheralsConsumer NondurablesEnergy Equipment & ServicesHMOs and HospitalsHomebuildingInsuranceIntegrated OilInternet, Software ServicesInvestment Bankers and BrokersMediaMultiline RetailPharmaceuticalsPrecious MetalsSemis, Semi EquipmentTelecom EquipmentTobacco and AlcoholWireless CommunicationsUtilities View the results without voting