Don Dion's Weekly ETF Blog Wrap - TheStreet

Here is some of what Don Dion blogged about on RealMoney this past week.

Mexico ETF Gathers Steam

Posted 12/23/2009 11:48 a.m. EST

For ETF investors looking south of the border, the

iShares MSCI Mexico Investable Market Index Fund

(EWW) - Get Report

looks strong heading into the New Year.

EWW, which is designed to track the broad Mexican market, has gathered some momentum lately. In the three months ended Dec. 22, the fund has gained 12%. And it looks like the trend may continue with news this week, that

Wal-Mart de Mexico

-- EWW's second largest holding at 8% of its total portfolio, behind

America Movil

(AMX) - Get Report

, which makes up 23% of assets -- received shareholder approval to acquire Wal-Mart Centroamerica from parent company

Wal-Mart Stores

(WMT) - Get Report

. According to

The Wall Street Journal

, the estimated $2.7 billion acquisition will create a 1,929-store behemoth, ranging from restaurants to clothing stores across six countries.

While EWW's momentum is growing, it hasn't raced ahead of the

iShares MSCI Brazil Index Fund

(EWZ) - Get Report

, which is still the go-to ETF when it comes to investing in single South and Central American nations.

Still, you don't have to compromise. The

iShares S&P Latin America 40 Index Fund

(ILF) - Get Report

offers heavy exposure to both Brazil and Mexico. Together, these two nations make up 85% of the fund's total portfolio.

>>Bull or Bear? Vote in Our Poll

First Trust Nat-Gas ETF Should Lead the Pack

Posted 12/23/2009 6:51 a.m. EST

First Trust ISE Revere Natural Gas

(FCG) - Get Report

should continue to outperform the energy ETF field heading into the end of 2009.

On

Dec. 11

, I picked

iShares Dow Jones U.S. Oil Equipment

(IEZ) - Get Report

as the best play for a crude oil rebound and

First Trust ISE-Revere Natural Gas

(FCG) - Get Report

as the best play for a crude and natural gas rebound. (If natural gas went up and crude oil went down, then

U.S. Natural Gas 12-Month

(UNL) - Get Report

would be the best choice.)

In the interim, a spike in natural gas prices due to harsh winter weather and

Exxon Mobil's

(XOM) - Get Report

buyout of

XTO Energy

(XTO)

powered the funds with natural gas exposure to higher ground.

iShares Dow Jones U.S. Oil & Gas Exploration & Production

(IEO) - Get Report

, for instance, with a top-10 holding in XTO, outperformed IEZ.

Since Dec. 11, IEZ gained 5.2%, and FCG gained 11.4%.

U.S. Natural Gas

(UNG) - Get Report

advanced 9.6% over the same period, while

U.S. Oil

(USO) - Get Report

climbed 3.1%.

I expect the favorable conditions for FCG to continue. Natural gas inventory reports should be bullish through the end of 2009, with cold weather and winter storms supportive of demand.

On Thursday, we'll get the natural gas inventory report for the week ending Dec. 18. Though the long-term outlook for natural gas is still bearish, this week's and next week's report should show declines in inventory and keep the recent rally alive.

Trade Agreement Would Boost Taiwan ETF

Posted 12/22/2009 1:43 p.m. EST

Investors will want to be positioned in

iShares MSCI Taiwan

(EWT) - Get Report

ahead of any breakthrough trade agreements in 2010.

Heading into 2010, one nation investors will want to pay attention to will be Taiwan. This nation, which since 1949 has been at odds with China, is preparing key talks for next week that may lead to a free trade pact, according to

The Wall Street Journal

.

An agreement between these two Asian nations would bolster Taiwan's technology industry as well as bring the countries one step closer to signing an official peace accord, according to the

Journal

.

ETF investors should keep an eye on the EWT. Designed to track the nation's aggregate market, EWT has 60% of its portfolio allocated to the information technology sector. The instrument's top three holdings include

Taiwan Semiconductor

(TSM) - Get Report

,

Hon Hai Precision Industry

and

MediaTek

. These firms account for 13.5%, 9.5% and 4.2% of the fund, respectively.

As a possible sign of the easing political and economic tensions between these two nations, Taiwan's

AU Optronics

(AUO)

is preparing to apply for its first flat-panel plant in China. AU Optronics is the 10-largest holding in EWT, accounting for 2.2% of the fund.

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You don't have to be an expert trader -- there are potential profits for investors at every level. And I think there's no better way to jump into the world of ETFs than through my brand-new service,

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.

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At the time of publication, Dion was long EWZ.

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.