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
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
, which makes up 23% of assets -- received shareholder approval to acquire Wal-Mart Centroamerica from parent company
. 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
, 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
offers heavy exposure to both Brazil and Mexico. Together, these two nations make up 85% of the fund's total portfolio.
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First Trust Nat-Gas ETF Should Lead the Pack
Posted 12/23/2009 6:51 a.m. EST
First Trust ISE Revere Natural Gas
should continue to outperform the energy ETF field heading into the end of 2009.
, I picked
iShares Dow Jones U.S. Oil Equipment
as the best play for a crude oil rebound and
First Trust ISE-Revere Natural Gas
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
would be the best choice.)
In the interim, a spike in natural gas prices due to harsh winter weather and
powered the funds with natural gas exposure to higher ground.
iShares Dow Jones U.S. Oil & Gas Exploration & Production
, 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
advanced 9.6% over the same period, while
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
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
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
Hon Hai Precision Industry
. 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
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.
A special note from Don: Put simply, I want to help you profit from ETFs.
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,
TheStreet ETF Action by Don Dion
At the time of publication, Dion was long EWZ.
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.