5 ETFs to Watch This Week

NEW YORK (TheStreet) - Here are five ETFs to watch this week.

Market Vectors Agribusiness ETF ( MOO)

Throughout the second half of 2010, one of the closest watched stories has been the rapid food price increases. This week, investors will gain more insight into how the jump in agricultural commodity prices has affected the farming industry when equipment supplier Deere & Company ( DE) reports its quarterly earnings performance on Wednesday.

There are a diverse collection of funds ETF investors can consider when looking for exposure to the agriculture industry. MOO provided investors with access to the companies responsible for supplying farmers with the machinery and chemicals needed to produce adequate yields. Deere represents the largest position within MOO's portfolio, commanding over 8% of the fund's assets.

iShares MSCI Mexico Index Fund ( EWW)

The international investing arena has been difficult to navigate recently because of the sovereign debt issues plaguing Europe, and China's government takes steps to reign in inflation.

Despite this economic turmoil, there are pockets of strength. For instance, Mexico and the rest of Latin America has remained particularly resilient. EWW, which reflects the performance of the broad Mexican marketplace, has seen a strong rally in recent months, powering back to pre-crisis levels and moving higher in our long-term momentum rankings. This fund is heavily dedicated to tech and the consumer, with telecom giant America Movil ( AMX) and Walmart de Mexico ( WMMVY) commanding the fund's top positions.

SPDR S&P Retail ETF ( XRT)

The retail industry will take center stage this week as shopping centers and online retailers prepare for crowds of Black Friday shoppers. Although the frenzy is still a few days away, thanks to early deal leaks from industry leaders such as Wal-Mart ( WMT) and Best Buy ( BBY), anticipation is already high.

Last week investors were treated to a slew of positive earnings reports from companies dedicated to various parts of the retail sector. The strength of their performance over the past three months lends credence to my belief of a consumer rebound. While XRT will benefit during the retail-fueled holiday season, investors may want to consider picking up this fund as a longer-term play on the larger consumer recovery.

iShares Cohen & Steers Realty Majors Index Fund ( ICF)

In the past I have attempted to explain my mixed feelings towards the current state of the real estate industry: oversupply issues have and will continue to weigh on the prospects for residential real estate and homebuilders, while the outlook for REITs and the commercial real estate industry looks far more promising. As a result, I have consistently urged real estate bulls to opt for REIT-focused funds rather than homebuilder ETFs.

Aside from the fundamentals of the real estate industry, REITs have proven popular because of their promise of strong distribution yields. Investors fearing economic issues plaguing various regions of the globe have increasingly turned to income-focused assets in hopes of securing consistent payouts.

According to a report in last week's Wall Street Journal, a number of the largest companies in the REIT industry have raised their dividends recently, indicating that the industry's fundamentals are improving further.

Real estate likely still has some choppy waters ahead of it as the markets continue along the road to recovery. However, the strong yields that come with funds such as ICF will aid in weathering these storms.

Market Vectors High Yield Municipal Index ETF ( HYD)

Sovereign debt issues facing the European Union reignited domestic debt concerns last week, sending investors fleeing from municipal bond ETFs. The exodus caused HYD to take a steep drop, going from all time highs to previous 2010 lows in a matter of days.

The budget issues in California are doing little to ease investor concerns, further pressuring this aspect of the fixed income industry. At 14%, California bonds represent the largest slice of HYD's index.

Going forward, municipal bonds will likely be a shaky region of the market. Investors looking for a more stable and promising play on fixed income should look to high yield corporate bond funds such as iShares $ iBoxx High Yield Corporate Bond Fund ( HYG) or dividend-paying equities such as those found underlying iShares Dow Jones Dividend Select Index Fund ( DVY).

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Written by Don Dion in Williamstown, Mass.

At the time of publication, Dion Money Management owned iShares MSCI Mexico Index Fund, iShares Cohen & Steers Realty Majors Index Fund, iShares $ iBoxx High Yield Corporate Bond Fund and iShares Dow Jones Dividend Select Index Fund.

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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