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 blog posts from the past week:


Frugality Puts Vanguard in the Lead

Published 1/05/2011 5:16 p.m. EST

2010 was a memorable year for the ETF industry, which drew increased attention, expanded its lineup and -- perhaps most notably -- passed the $1 trillion mark for assets. The National Stock Exchange's monthly report, released this morning, shows that newcomers to the industry are certainly making their presence known.

A casual observer of the ETF industry would most likely be familiar with BlackRock's ( BLK) iconic iShares ETF lineup as well as State Street's ( STT) SPDR brand. Both of these industry icons saw notable inflows during 2010. BlackRock remains the largest fund provider, with assets under management totaling $447 billion. In 2010, $30 billion flowed into the firm's products. State Street's SPDR lineup saw cash inflows of $12.5 billion during the same period.

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Vanguard -- perhaps best known for lower-cost, me-too products that offer exposure similar to older iShares and SPDR funds -- was the king of cash inflows in 2010. Consider this: In 2005, the iShares product line saw cash inflows of nearly $45 billion, while Vanguard saw just $4.7 billion in total cash enter its relatively new line. In 2010, Vanguard's net cash flows topped those of any other single issuer. When trading ended on Dec. 31, 2010, Vanguard funds had attracted nearly $40.5 billion during the calendar year.

What makes Vanguard such a big threat to the competition? Looking forward, it's the return of longer-term investors. Vanguard has a loyal client base, a well-known mutual fund line-up and a commission-free trading platform for its brand-name ETFs. Instead of fighting the flight from mutual funds, Vanguard has done a good job of staying one step ahead. By developing ETFs targeted at longer-term investors -- many fund strategies sound extremely similar to those of mutual funds -- the firm is able to easily transition existing clients while attracting frugal ETF investors from other areas.

Some of Vanguard's most popular products include the Vanguard MSCI Emerging Markets ETF ( VWO), the Vanguard MSCI Total Market ETF ( VTI), the Vanguard Barclays Total Bond ETF ( BND) and the Vanguard MSCI Europe Pacific ETF ( VEA).

As the Vanguard's inflows suggest, the firm has done a remarkable job of molding its line of ETFs to meet the desires of today's investors. ETF investors are a frugal bunch who will certainly cross the street for lower expense ratios. Without issuing a single futures-backed commodity ETF or a single leveraged ETF, Vanguard has still managed to become an industry-shaping presence. If ETF investors want what Vanguard's got, the entire industry might start taking a hard look at its roots in order to envision the future of the ETF universe.

At the time of publication, Dion Money Management held no position in the stocks mentioned.


Food Prices Skyrocket

Published 1/05/2011 11:06 a.m. EST

World food prices hit record highs in December, according to a report issued by the Food and Agriculture Organization today; an index of 55 food commodities gained for the sixth straight month. With everything from sugar to meat products getting pricier, this headline-making news should cause commodities-focused ETF investors to shift their attention away from precious metals, at least for today.

While funds like SPDR Gold Shares ( GLD) and the Market Vectors Rare Earth Metals ETF ( REMX) have been getting most of the attention from the ETF crowd in recent weeks, funds that track agriculture should soon be on the rise.

Gazing down from my window on the post-blizzard cleanup last week, I touched upon how weather and natural disasters had been so detrimental to crops in 2010 in a post titled " Sowing the Seeds of Profit." Florida had just reported devastating news about certain key consumption crops, and the slow trading week seemed to provide the perfect opportunity to check out a futures-backed fund like the PowerShares DB Agriculture ETF ( DBA) or an equities-backed pick like the Market Vectors Agribusiness ETF ( MOO).

In the wake of today's report, however, I'd like to recommend DBA with even more conviction. DBA seems tailored to this particular agricultural calamity, tracking a basket of commodities that includes many of the key foods mentioned in this morning's report. In reporting the record-high prices this morning, the Food and Agriculture Organization noted that sugar and meat in particular had broken through record prices. Sugar, lean hogs and live cattle are all represented in DBA's underlying portfolio.

There are plenty of reasons why investors should be wary of certain futures-backed single commodity funds (like the United States Natural Gas ETF ( UNG) and the United States Oil ETF ( USO), but the breadth of DBA's underlying basket helps to mitigate many of these concerns. PowerShares has proven to be proactive in structuring funds in order to attempt to stay within position limitations. That being said, DBA is certainly a fund designed with a more sophisticated investor in mind.

DBA should prove to be profitable in both the short term and the long haul. News of today's report and the imminent food-price crisis should help to lift DBA in the sessions ahead, while longer-term concerns about restoring crops and meeting the demands of a growing global population should help to drive DBA higher over time. Keep an eye on this large, liquid agriculture ETF in the days ahead.

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


Keep an Eye on Copper

Published 1/03/2011 7:17 a.m. EST

It's been hard to miss the dramatic jump in copper prices during the past month, and the corresponding jump in the price of the iPath DJ-UBS Copper ETN ( JJC) has been staggering. During the month of December, JJC rose nearly 17%.

While some of this increase is certainly due to a recovering economy and increased activity among homebuilders, some investors have pointed the finger at several hotly anticipated copper ETFs. Blackrock's iShares ETF line, JPMorgan and ETF Securities have all filed with the SEC to launch copper funds. Some of the upcoming funds promise to be physically backed, like the rapidly expanding and well-known SPDR Gold Shares ETF ( GLD).

In November, JPMorgan purchased approximately $1.5 billion worth of copper, a necessary step in the creation of a copper fund. During the period that JPMorgan made the purchases, copper prices rose several percentage points. While none of the funds have launched yet, investors can expect to see more activity in both the market for physical copper and the market for copper futures contracts as these issuers prepare to launch the new funds.

Will this activity alone affect the price of copper in the months ahead as issuers stockpile the commodity in anticipation of fund launches? In the past, regulators have kept an increasingly close watch on funds like the U.S. Natural Gas ETF ( UNG) and the U.S. Oil ETF ( USO), as these funds were blamed for the rising price of their respective commodities. JPMorgan traders are also being investigated about manipulating silver prices, so I'm sure that regulators are going to keep a close eye on any copper funds that are launched in upcoming months.

Investors are becoming accustomed to using ETFs to gain exposure to commodities, and more sophisticated investors are eager to move beyond gold and silver to other precious metals and base metals. I'd recommend JJC to sophisticated investors in the months ahead, and the upcoming physically backed copper ETFs will be even better for everyday investors. The speculation over copper and copper prices and the new funds should help to fuel copper in the months ahead, and this should help to keep JJC's trajectory on upswing. JJC is certainly a fund to watch.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.