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'Corrections' in Country, Sector ETFs: Value Plays

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK ( ETF Expert) -- The CBOE Volatility Index (VIX) closed more than 10% above its long-term 200-day moving average. That hasn't happened since August of 2010, back when investors fretted the possibility of a double-dip recession.

Today, the worries are more cumulative in nature. Uncertain job growth, depressed home values, debt troubles in Europe, rising commodity prices, the threat of rising rates, inflation in Asia, civil unrest in Libya, and now, nuclear radiation levels in Japan.

In spite of a laundry list of concerns, and in spite of a -17% 2-day collapse in Japan's Nikkei stock market average, the S&P 500 has pulled back a mere -4.6% from multi-year highs. Even when one looks at the intra-day high to pullback low, it's only -6.1%.

There are several interpretations one might give for the relative resiliency. One, investors may view the tragedy in Japan and the Middle East-inspired spike in oil as "temporary." If that's the prevailing viewpoint, then there's little reason to be uneasy about the global economy's longer-term well-being.

A second possibility? Envy. Yes, envy! More specifically, scores of investors missed the remarkable gains in 2009 and in 2010. They've repositioned assets in 401k stock funds and they've returned to investment advisers for guidance. Stock fund managers are buying every dip with the extra cash, while money managing advisers are doing the same. The envy hasn't reached "irrational exuberance" levels of greed, but envy is playing a part.

A third interpretation? Investors are shrewdly focusing on positives for stock assets -- from strength in manufacturing to corporate earnings growth to easy-money Fed policy. Of course, the latter probably accounts for the timing of Egyptian/Libyan/Tunisian unrest, but you'll never hear Bernanke admit to it.

Whether investors have bull market envy, or whether they view the current geopolitical risks as temporary, or whether they've returned to an analysis of P/E ratios, nobody should ignore ETFs that have "corrected." Here's an overview of key Country ETFs and key Sector ETFs that have pulled back 10%+:
Sector Corrections of 10%+
Approx %
Market Vectors Nuclear Energy (NLR) -21.1%
Market Vectors Rare Earth Metals (REMX) -13.8%
iPath Agriculture (JJG) -12.0%
Global X Copper Miners (COPX) -11.6%
Global X Silver Miners (SIL) -11.3%
SPDR S&P Semiconductor (XSD) -10.3%
Guggenheim Airline (FAA) -10.3%
Country Sector Corrections of 10%+
Market Vectors Small India (SCIF) -24.1%
Market Vectors Vietnam (VNM) -21.4%
iShares Small Cap Japan (SCJ) -14.5%
iShares Chile (ECH) -13.8%
iShares Peru (EPU) -10.6%
Global X Columbia (GXG) -10.0%
iShares MSCI Turkey (TUR) -10.0%

Market Vectors Nuclear Energy (NLR)? I don't see any confidence returning to the sector for years. NLR is destined to become a day-trading tool with regulators debating the risks of a previously promising alternative energy source.
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