5 ETFs to Watch This Week

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


This week we kick off the second quarter of 2012. From an economic perspective, the first week of April is a busy one, particularly for the jobs picture. On Friday, all eyes will turn to the monthly nonfarm payroll report. The bar has been set high; during the past three months, we have enjoyed some solid signs of improvement on this front.

History is on the market's side. Over the years, April has consistently proven to be a strong month for stocks. Nevertheless, although the market's strength and resilience during the opening months of the year have boosted confidence, patience is still warranted.

iPath Dow Jones UBS Natural Gas Subindex Total Return ETN ( GAZ)

The premium-laden GAZ fell last week as commodities stumbled and the ETN retreated toward its underlying index. The instrument's weak spell has extended beyond the past week, though. On a one-month basis, GAZ has fallen about 25%.

Bull or Bear? Vote in Our Poll

The dismal performances seen from GAZ and the VelocityShares Daily 2X VIX Short Term ETN ( TVIX) over the past month have helped to underscore the inherent dangers associated with disconnected exchange-traded products.

GAZ's premium has declined considerably, but at 60%, it is still trading well out of line with its benchmark. Steer clear of this product.

Energy Select Sector SPDR ( XLE)

We continue to see signs of improvement here in the U.S., but China growth fears are putting a damper on optimism. Commodity producers, in particular, are feeling the pressure as the emerging growth engine struggles to get itself back on track.

Over the past month, XLE and the Materials Select Sector SPDR ( XLB) have suffered some notable losses.

>>Brand-Name IPOs Overshadow Unknowns

As we head into a new quarter, I encourage investors to hold off on running for cover. News from China will continue to dominate headlines, but you can weather the turmoil by maintaining a strong, diversified portfolio.

Market Vectors Agribusiness ETF ( MOO)

Earnings season will ceremoniously kick off next Tuesday when aluminum giant Alcoa ( AA) steps up to the plate. This week, though, there are a number of other companies scheduled to report. For agriculture-hungry investors, Monsanto's ( MON) showing will be particularly important to watch.

MOO relies heavily on the performance of this seed giant. Monsanto is the fund's No. 1 holding and accounts for more than 7% of its portfolio.

Investors looking for agriculture exposure have a number of options at their disposal. In addition to MOO, which tracks popular companies like Monsanto and Deere ( DE), there is the PowerShares DB Agriculture Fund ( DBA). By tracking a basket of futures contracts, the fund provides investors with direct exposure to crop price fluctuations. In 2012, the equity-backed MOO has been the better bet, outperforming DBA by a comfortable margin.

iShares Dow Jones U.S. Consumer Goods Index Fund ( IYK)

Late last week, investors were greeted to some mixed news regarding the state of the consumer. Although income growth was uninspiring, the personal spending data exceeded analysts' expectations. Questions have lingered regarding the state of U.S. consumers, but recent reports appear to indicate that they are still showing resilience.

The 5 Dumbest Things 'April Fool's' Quiz

As wallets stay open, funds like IYK and the iShares Dow Jones U.S. Consumer Services Index Fund ( IYC) could push higher.

-- Written by Don Dion in Williamstown, Mass.
At the time of publication, Dion Money Management was long IYK.

If you liked this article you might like

Powell's First Rate Hike Is an Early Test for New Fed Chair, Stock Market Bulls

Powell's First Rate Hike Is an Early Test for New Fed Chair, Stock Market Bulls

The Market's Tug of War Continues

The Market's Tug of War Continues

How to Use Options to Your Advantage in This Volatile Stock Market

How to Use Options to Your Advantage in This Volatile Stock Market

Novice Trade: SPY

Novice Trade: SPY

Charts Say Any Dips We Get in Market This Week Should Reverse

Charts Say Any Dips We Get in Market This Week Should Reverse