5 ETFs to watch this week

Exchange-traded funds in real estate, agriculture and emerging markets are worth watching..

By TheStreet Staff Sep 27, 2010 11:09AM

By Don Dion, TheStreet

 

ETF investors will be watching to see whether gold continues to rise this week while monitoring some key reports and developments in real estate, agriculture and emerging markets. Here are five exchange-traded funds that could have an active week.

 

1. iShares Cohen & Steers Realty Majors Index Fund (ICF)

 

Last week, investors had their fingers on the U.S. real-estate industry's pulse as a number of industry leaders such as

KB Homes (KBH) and Lennar (LEN) reported their quarterly earnings numbers.

 

Additionally, there were reports regarding new-home sales and housing starts. Looking to this week, real-estate investors will have their eyes set on Tuesday, when Case-Shiller data for July are released.

As I explained last week, despite my generally positive outlook for the broad economy, I have reservations about the real-estate industry. While there may be strength in the short term, I still see supply issues as a persistent weight on homebuilders and ETFs such as SPDR S&P Homebuilder ETF (XHB).

 

REITS and commercial real estate, however, appear more stable looking to the future. Risk tolerant, income-seeking investors may find a fund such as ICF attractive.

 

2. PowerShares DB Agriculture Portfolio (DBA)

 

Agriculture continues to be a hot market sector, and it will be interesting to watch both the futures-based DBA and the equity-based Market Vectors Agribusiness ETF (MOO) in the coming days.

 

In Russia, growers continue to battle against the elements to get their winter wheat planted. Although rain is in the forecast, many fear that it is now too late to effectively plant crops. Threatened supplies will be bullish for wheat prices and could give DBA some fuel to move forward.

 

Meanwhile, the BHP Billiton (BHP) and Potash of Saskatchewan (POT) saga drags on.

 

Late last week, the Australian miner got FTC approval for its bid, bringing it one step closer to acquiring the Canadian fertilizer firm. The company will still need to face POT shareholders, which will likely prove a big hurdle.

 

3. iShares Gold Trust (IAU)

 

Gold and other precious metals remain in vogue as investors seek out protection against the volatility currently plaguing the global economy.

 

It seems as though nothing can stop gold's ascension. Last week, the yellow metal broke through all-time highs once again, this time flirting with $1,300.

 

Strength from gold can be seen helping other precious metals higher. Silver, as tracked by the iShares Silver Trust (SLV) has powered to 30-year highs while ETFS Physical Palladium Shares (PALL) powered higher as well. PALL will be a fund to watch in light of auto and truck sales numbers which will be released at the end of this week.

 

4. iShares MSCI Brazil Index Fund (EWZ)

 

The Brazil ETF will be exciting to watch this week as investors digest the total effect of multi-billion dollar stock offering of its top holding, Petroleo Brasileiro (PBR). The massive state-owned oil company commands the largest position among EWZ's index, representing over 16% of the fund's total portfolio.

 

With economic turmoil continuing to threaten Europe and the U.S., and concerns regarding the strength of China's growth picture, Latin American nations such as Brazil, Chile and Mexico remain attractive regions of the globe for internationally focused investors seeking alternative destinations.

 

5. iShares Russell 2000 Index Fund (IWM)

 

Last week, Vanguard continued its assault on BlackRock's (BLK) iShares line of ETFs with the launch of a suite of funds designed to track variations of the Russell indexes.

 

As with the company's S&P-based products, Vanguard hopes to drive cost-conscious investors into their products by slashing their expense ratios. iShares' IWM currently carries a 0.20% expense ratio while Vanguard's Vanguard Russell 2000 Index ETF (VTWO) carries a 0.15% expense ratio.

 

Thanks to low interest rates and the recent uptick in M&A activity, small-cap companies such as those tracked by IWM and VTWO have become an attractive investing destination. It will be interesting to see how VTWO performs during its first full week of trading next week.

 

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