Dion's Weekly ETF Winners and Losers
NEW YORK (TheStreet) --Here are this week's winners and losers.
Winners
Market Vectors Junior Gold Miners ETF
(GDXJ) - Get Report
11.9%
Gold and precious metals were big beneficiaries from the past week's uncertain market environment. The combination of the mid-term elections and the
Federal Reserve
's policy statement helped create an environment ideal for gold and precious metals to power higher. In response to the metal's strength, miners were able to power higher.
Leading the slice of the precious metals industry higher were the smaller companies responsible for unearthing gold.
Junior miners tend to be more volatile than larger producers such as
Barrick Gold
(ABX)
. Conservative investors should use caution when venturing into GDXJ.
iPath Dow Jones UBS Sugar Total Return Subindex ETN
(SGG) - Get Report
8.6%
Sugar continued its assault higher this week, aided by a combination of restricted supply and increasing demand. The sweetener-linked ETN's performance throughout 2010 has been exciting to watch. The start of the year was marked by all-time lows. Now, the fund has managed to take off higher, marking brand new all-time highs.
Wild swings are not uncommon among single-commodity ETFs and ETNs. Investors looking for agriculture exposure without a rollercoaster-like experience that comes with funds like SGG should turn to a more diversified product such as
PowerShares DB Agriculture Fund
(DBA) - Get Report
.
Guggenheim China Real Estate ETF
(TAO) - Get Report
7.7%
The Chinese real estate industry was a big winner, powering TAO to strong gains this week.
iShares MSCI Hong Kong Index Fund
(EWH) - Get Report
, which dedicates a substantial percentage of its index to a number of the same real estate players, shot higher as well.
The strength from TAO and EWH highlights the general investor interest in the emerging markets. As investors seek opportunities outside of the United States and the rest of the developed world, funds designed to track countries such as China, Brazil and India will continue to wildly popular products.
Losers
iPath S&P 500 VIX Short-Term Futures ETN
(VXX) - Get Report
-15.0%
Mid-term elections and other notable political events typically make for a volatile market environment. This week, however, the volatility index tracking ETNs continued to tread lower, once again locking in new all time lows.
Despite the dismal performance from VXX and
the iPath S&P 500 VIX Mid-Term Futures ETN
(VXZ) - Get Report
, these funds continue to be popular among investors. According to the October flow report from the National Stock Exchange, these funds saw notable inflows during the month.
Despite their popularity, I would advise investors to avoid trying their luck with either of these products. It is unclear as to when they will at last stabilize.
iPath Dow Jones Natural Gas Total Return Subindex ETN
(GAZ) - Get Report
-2.4%
Natural gas futures got battered this week, leading GAZ and the
United States Natural Gas Fund
(UNG) - Get Report
lower.
Although I consider both of these funds poor choices, I have been particularly concerned about GAZ as of late. Strong demand for this product has caused this fund to disconnect from its underlying assets, resulting in the creation of a substantial premium. Until this premium disappears, it is sure to perform uncertainly.
Interestingly, while GAZ and UNG tumbled this week, the equity-focused
First Trust ISE Revere Natural Gas Index Fund
(FCG) - Get Report
saw some of the strongest gains across the ETF industry.
iShares 20+ Year Treasury Bond Fund
(TLT) - Get Report
-2.0%
Long-term U.S. Treasuries took a nosedive on Wednesday after the Federal Reserve released its policy announcement. While TLT tumbled hard, funds designed to track the inverse performance of this asset class, jumped. This meant a week of gains for the
ProShares UltraShort 20+ Year Treasury Bond Fund
(TBT) - Get Report
.
With the Fed's announcement behind us, it will be interesting to see how TLT performs in the coming week.
Written by Don Dion in Williamstown, Mass.
At the time of publication, Dion Money Management owned PowerShares DB Agriculture Fund.
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.
