NEW YORK ( TheStreet) -- Don Dion posts his current insights on the stock, bond, commodity and currency markets in his RealMoney blog, anticipating which ETFs will be in play next.

Here are three of his blogs from the past week.

iShares Gold Takes a Run at GLD

Published 7/1/2010 10:20 a.m. EDT

In a story of David vs. Goliath, the iShares Comex Gold ETF ( IAU) is challenging the gargantuan SPDR Gold Shares ( GLD), which is the second-largest ETF in the U.S. Fear is permeating the market, and it's impossible to miss the rush to physically backed gold ETFs. BlackRock ( BLK), owner of the iShares family of ETFs, clearly sees the trend as an opportunity.

While the forces that shape the ETF industry are becoming more complex with time, first-mover status is still a powerful factor. State Street's ( STT) GLD beat IAU to the market by just two months, launching in November of 2004, and it has remained the dominant fund since. While the two funds offer nearly identical exposure, GLD had $49.2 billion in assets as of May 31, while IAU had just $3.3 billion.

Over the last five years, IAU's managers have seemed content to follow in GLD's shadow. As investor fear rises and gold ETFs become more popular, IAU is now ready to go to war.

On June 11, BlackRock made its first grab for investor attention, announcing a 10-for-1 split for shareholders after gold hit new highs. By executing a share split, IAU became more affordable. It seemed like BlackRock was attempting to appeal to investors that might be on the fence because of the cost of owning a gold ETF.

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Blackrock's second bid for assets came today, as IAU's sponsor's fee was reduced to 25 basis points from 40 bps. The sponsor's fee for GLD is 40 bps.

The share split and fee reduction are both aggressive plays to attract assets, and time will tell if they pay off. As of June 29, State Street's fund still had a commanding lead, with GLD having net assets of $52.4 billion and IAU having $3.4 billion.

Competition among issuers is good for ETF investors, and I expect to see more aggressive pricing in the months ahead. Gold is a hot commodity for nervous investors, and BlackRock seems sure that fear won't die down anytime soon.

Since both GLD and IAU are large, liquid funds, I'd recommend either as a good long-term investment. If you're just scouting out gold ETFs now, it's worth considering IAU, which is now the less expensive fund. If you already own GLD, I don't see a reason to switch yet.

At the time of publication, Dion Money Management was long IAU.

Bet on a Stronger Japan

Published 7/1/2010 7:23 a.m. EDT

Japan got some unexpected good news for its economic outlook today, and investors who want to invest in a further recovery there can bet on Japanese markets with iShares MSCI Japan ( EWJ). Investors also have the option of betting on the country's currency by using CurrencyShares Japanese Yen Trust ( FXY).

The Japanese government today issued its report on sentiment among manufacturers. This index representing corporate sentiment among large manufacturers unexpectedly turned positive for the first time in two years. In the index, the final figure essentially represents the difference between the percentage of companies that have confidence in their forward outlook and those that don't, so a positive figure means that those with optimism on the outlook for manufacturing outnumber those that are pessimistic.

In another part of the survey, large manufacturers also indicated that they will be willing to increase their capital spending by more than when the previous survey was taken in March.

Although confidence may be growing among the companies that are responsible for a large part of Japan's economic growth, markets there have been following the rest of the world downward recently on skepticism about economic recovery around the world. As an economy with a large number of export-oriented businesses, Japan's economy depends on the health of consumers abroad for some of its momentum.

Another problem could be if the yen gains more ground against weaker currencies such as the euro, since this would eat into the bottom line of exporters.

Japan's problems, though, are also those of economies worldwide, meaning that if the global recovery stalls, the country won't be the only one to have troubles. So if investors are looking for an international bet on the global economic recovery, Japan is a good place to start, because it is generally less volatile than other markets in Asia, and now, looks even more secure than some European countries.

The confidence the Japanese economy is exhibiting now could very well turn into large gains for markets there as soon as pessimism on global growth passes, and the best way to tap into the currency's strength and equity markets simultaneously is with EWJ. This ETF does not hedge against currency fluctuations, so any ground the currency gains against the dollar will also translate into upside for investors.

At the time of publication, Dion Money Management was long EWJ.

How to Play a Euro Bounce

Published 6/30/2010 2:21 p.m. EDT

Good news came from an unlikely place today as banks in Europe showed less need to borrow from the European Central Bank (ECB). Debt problems in Europe have battered broader markets in recent months, so it's no surprise that the announcement helped to lift markets across the globe in early trading today.

Is this for real? Are European banks stronger than we thought? The ECB is now saying that it will loan 131.9 billion euro ($161.5 billion) to banks in a three-month tender. Recent estimates from analysts pegged that figure at as high as 300 billion euro.

The ECB report isn't the only good news coming out of Europe. Data earlier this week showed that consumer confidence in Europe is on the rise while German exports have continued to be a bright spot.

Should you bet on the bounce? Only with care. I suspect that the ECB's announcement will have a positive impact on the euro for the remainder of this week, and it's worth it for active traders to gain exposure to the upside with the massive CurrencyShares Euro Trust ( FXE).

FXE isn't an investment that you can "set and forget," however. Currency investments in general are highly volatile, and many of Europe's underlying problems remain. While recent austerity pledges show that the EU is willing to put its right foot forward, enacting the measures won't be easy.

It's good news that European banks are slightly stronger, and I hope that it will help to quell some fears in the broader market. FXE is a good short-term play, but don't lose sight of the difficult-to-solve underlying causes. Investors who purchase FXE should be prepared to keep a close eye on this ETF.

At the time of publication, Dion Money Management was long FXE.

-- Written by Don Dion in Williamstown, Mass.

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. Membership is limited, so click here to get in on the action!

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.

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