Dion's Weekly ETF Winners and Losers

NEW YORK (TheStreet) -- Here are this week's ETF winners and losers.

Winners

iShares Dow Jones U.S. Home Construction Index Fund ( ITB) 5%

Since the start of October, homebuilders have managed to carve out a steady upward path, helping both ITB and the SPDR S&P Homebuilder ETF ( XHB) pierce major moving averages and recover the vast majority of the losses from their early-August meltdown. In the opening days of the new year this strength has continued.

Next Wednesday, Lennar ( LEN) is slated to kick off earnings season for this industry. This report will directly impact the performance of homebuilder-related ETFs because the firm is a top-10 holding in both ITB and XHB.

Market Vectors Steel ETF ( SLX) 4.6%

Two days of strength at the start of the week were enough to propel the steel producer tracking SLX onto this week's winners list. Like other ETFs linked to growth-correlated industries, SLX suffered in the second half of 2011 as global macroeconomic headwinds wreaked havoc on investor confidence.

With Europe still embroiled in its sovereign debt woes, and emerging nations working diligently to stay on the growth path, the outlook for steel and other market-correlated industries will remain cloudy. Investors should continue to be prudent. While it can be tempting to dive into risk during periods of strength, be sure to maintain an element of protection.

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iShares Silver Trust ( SLV) 3.7%

It has been a rough couple of months for silver as looming market headwinds have driven investors out of industry-linked commodities. During the final days of 2011 and opening week of 2012, however, there have been some glimmers of strength as SLV has enjoyed a welcome bounce.

The fund's ability to hold onto these gains will likely be tested as market turmoil continues to weigh on sentiment. Investors looking to place a bet on the future prospects of silver should keep any exposure small.

At the same time that silver was pushing higher, palladium prices were taking a shot across the bow. ETFS Physical Palladium Shares ( PALL) tumbled over 5.5% this past week for one of the ETF industry's biggest losses.

Losers

iPath S&P 500 VIX Short Term Futures ETN ( VXX) -11%

After ringing in the new year with losses, VXX spent the next three days heading lower. The retreat has brought the fund back to levels not seen since mid-August. This marks the first time that VXX has spent more than a single session trading below its 200-day moving average since breaking above this level in late summer.

There is no denying that challenges stand in the way for investors down the road. However, as seen by the steady declines from VXX and other VIX-tracking exchange traded products in recent months, these products are not the best options for long-term investors looking to take advantage here.

iShares MSCI Spain Index Fund ( EWP) -5.4%

While the Spain ETF led the way lower, it was Unicredit, the Italian banking giant, which stole the spotlight this week as investors, analysts, and market commentators quickly put their focus back on the European debt drama. The institution's woes weighed heavily on iShares MSCI Italy Index Fund ( EWI), pushing the ETF below its December lows.

Looking to the week ahead, Europe will likely continue to direct investor attitudes. Steer clear of EWI, EWP and other EU-linked funds.

iShares Barclays 20+ Year Treasury Bond Fund ( TLT) -2.1%

Investors returned from the long holiday weekend in a buying mood. As the "risk-on" attitude prevailed, safe-haven asset classes such as long-term Treasuries fell out of favor.

Before seeing a bounce at the end of the week, TLT's three-day string of losses pushed the fund back to its 50-day moving average. Keep an eye on this level. Since November, it has served as a persistent point of support.

-- Written by Don Dion in Williamstown, Mass.

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At the time of publication, Dion Money Management did not own any equities mentioned.

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