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Dion's Weekly ETF Winners and Losers


iShares S&P North American Technology-Multimedia Networking (IGN) +2.5%

Tech ETFs gained this week after an optimistic report from chip-making giant Intel (INTC). While broad technology funds such as iShares Dow Jones Technology Index Fund (IYW) traded higher, it was networking funds such as IGN and PowerShares Dynamic Networking Portfolio (PXQ) that have led the pack.

Looking to the second half of 2010, I believe that the technology industry will continue to be a dominant player. Investors looking for a strong, stable play for this specific slice of the market should stick to PowerShares QQQ (QQQQ) and First Trust Dow Jones Internet Index ETF (FDN).

iShares MSCI Sweden Index Fund (EWD) +1.6%

A number of European nation-focused ETFs pocketed big gains as fears concerning the region's economic situation abated. EWD, which tracks the broad Swedish markets, was the biggest mover of the group.

Despite its strength through much of the week, on Friday EWD took a shot across the bow, even after top holding Ericsson reported strong earnings performance during the quarter ended June 30.

United States Natural Gas Fund (UNG) +2.2%

The natural gas ETF had a strong week thanks largely to an impressive rally on Thursday. The sweltering heat in many parts of the nation has caused consumers to crank up their air conditioners, and along with them, demand for natural gas from utilities.

Although UNG witnessed a rally heading into the first part of June and appeared on the verge of a breakout, the fund seems to have reverted back to a sideways trading range. Investors looking to play natural gas should avoid UNG and instead stick to First Trust ISE-Revere Natural Gas Index ETF (FCG).


Market Vectors Steel ETF (SLX) -6.2%

China's economic growth numbers were weaker than expected, leading forecasters to question the nation's ability to sustain the same levels of breakneck economic expansion seen in previous quarters. Fears of a slowdown in Asia put pressure on basic materials like steel, coal and copper, driving SLX, Market Vectors Coal ETF (KOL) and iPath Dow Jones-UBS Copper Total Return Subindex ETN (JJC) lower.

Claymore/BNY BRIC ETF (EEB) -4.7%

ETFs designed to track the BRIC nations suffered this week thanks to fears that the China economic growth engine was slowing down. However, China was not the only member of this acronym to face pressure. India- and Brazil-focused ETFs, such as the WisdomTree India Earnings ETF (EPI) and iShares MSCI Brazil Index Fund (EWZ), also struggled to find strength against global economic headwinds.

iShares FTSE/Xinhua China 25 Index Fund (FXI) -4.8%

The China-focused ETF that took the hardest hit was FXI. I have long urged investors looking for China exposure to avoid this product in favor of the small-cap-focused Claymore/AlphaShares China Small Cap Index ETF (HAO). Looking to the future, I feel that the real growth story in China is not the nation's big state-owned corporations that underlie FXI and other large cap China ETFs. Rather I'm looking to the Chinese consumer. HAO is the best way to take advantage of this demographic.

At the time of publication, Dion Money Management owns QQQQ and FDN.

-- Written by Don Dion in Williamstown, Mass.

Don Dion is president and founder of Dion Money Management, a fee-based investment advisory firm to affluent individuals, families and nonprofit organizations, where he is responsible for setting investment policy, creating custom portfolios and overseeing the performance of client accounts. Founded in 1996 and based in Williamstown, Mass., Dion Money Management manages assets for clients in 49 states and 11 countries. Dion is a licensed attorney in Massachusetts and Maine and has more than 25 years' experience working in the financial markets, having founded and run two publicly traded companies before establishing Dion Money Management.

Dion also is publisher of the Fidelity Independent Adviser family of newsletters, which provides to a broad range of investors his commentary on the financial markets, with a specific emphasis on mutual funds and exchange-traded funds. With more than 100,000 subscribers in the U.S. and 29 other countries, Fidelity Independent Adviser publishes six monthly newsletters and three weekly newsletters. Its flagship publication, Fidelity Independent Adviser, has been published monthly for 11 years and reaches 40,000 subscribers.

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EEB $21.41 0.00%
EWD $27.08 0.00%
FXI $29.73 0.00%
IGN $31.15 0.00%
SLX $18.25 0.00%


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