NEW YORK (TheStreet) -- Here are this week's winners and losers among ETFs.
iPath Dow Jones UBS Sugar Total Return Subindex ETN
Sugar prices have staged a dramatic recovery from their May doldrums. Increased global demand, coupled with supply issues such as flooding in Pakistan, is fueling this rally higher.
SGG may have further to run in the near future. However, I would advise investors to hold back on buying this fund. Agriculture is a popular region of the market right now, and a better way to take advantage of it would be through a broad fund such as the
PowerShares DB Agriculture ETF
Market Vectors Agribusiness ETF
SPDR S&P Semiconductor ETF
The semiconductors, which struggled through the final weeks of the summer season, staged a nice rally this past week. Funds such as XSD and
PowerShares Dynamic Semiconductor Portfolio
benefited from the growing optimism regarding the global economic recovery.
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Looking forward, these funds may have more fuel left in the tank if optimism prevails. However, if the markets run into a shakeup in the road ahead, I wouldn't be surprised to see them get knocked around.
Tech remains a popular story. However, some subsectors of this industry are riskier than others. I feel that a more promising tech-related ETF is the
First Trust NYSE Internet Index ETF
ETFS Physical Palladium Shares
Gold and silver commanded headlines this week as precious metal prices surged higher. This proved beneficial for ETFs such as
Market Vectors Junior Gold Miners ETF
iShares Silver Trust
, but the biggest mover within this industry was palladium, as evidenced by the dramatic rise from PALL.
As a precious metal, palladium can be turned to for protection against market swings. However, because it is heavily used in the production of catalytic converters, the metal benefits during times of economic optimism.
iPath S&P 500 VIX Short-Term Futures ETN
The bulls pulled out a nice week of gains, causing economic fears to wane. This has weighed on ETFs designed to track the VIX, such as VXX and iPath
S&P 500 VIX Mid-Term Futures ETN
Interestingly, although we remain in volatile economic times, the VXX has tumbled hard, carving out brand new all-time lows. Investors should ignore this and other VIX-related products.
Dow Jones U.S. Home Construction Index Fund
Despite the general strength of this week's market, one area of weakness remains the real estate industry. This week, ITB and
SPDR S&P Homebuilders ETF
got knocked after a poor report from RealtyTrac, which saw record foreclosures in August.
Turning to next week, real estate investors will have their ears to the ground as a number of economic reports are released. I feel that this area of the market has a rough road ahead of it. Cautious investors should steer clear.
CurrencyShares Japanese Yen Trust
Perhaps the biggest story of this past week was the Japanese government's decision to intervene against the yen's dramatic rally.
Investors, fearing economic turmoil, have been piling into the yen as a way to skirt concerns, driving up its value, placing pressure on Japanese equities. After weeks of warnings from top government officials, steps were taken to cool the yen's run-up. So far, with the yen and FXY falling, the efforts have been effective.
Looking ahead, it is unclear as to whether or not the FXY will remain subdued. If investors continue to turn to the currency for protection, the overall effect of the intervention may be small.
-- Written by Don Dion in Williamstown, Mass.
At the time of publication, Dion Money Management was long PowerShares DB Agriculture ETF, Market Vectors Junior Gold Miners ETF and First Trust NYSE Internet Index ETF.
Don Dion is president and founder of
, 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.