5 ETFs to watch this week

Keep an eye on funds tracking oil, retail, gold, China's emerging middle class and Sweden's stable economy.

By TheStreet Staff Mar 7, 2011 11:15AM

Image: Stock market report (© Corbis)By Don Dion, TheStreet


Here are five exchange-traded funds to keep an eye on this week.


1. United States Oil Fund (USO)


Oil has been on the minds of investors around the globe as political turmoil pushes the price of crude north of $100 a barrel. As we head into the week, the protests sweeping the Middle East and North Africa show little signs of waning, and once again market confidence will likely be tested.


USO has seen a steep run-up over the past few weeks and is currently testing $42. This will be interesting to watch. Since late 2009, it has proved to be a point of resistance on a number of occasions.


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2. Guggenheim China Small Cap ETF (HAO)


Investor interest in emerging markets has waned recently as global political turmoil drives investors to safer asset classes. However, nations including China continue to be major economic growth engines and therefore must not be ignored.

The small-cap-focused HAO has long been my ETF of choice when it comes to tracking China's breakneck economic growth, because it offers exposure to the nation's burgeoning middle class.


This particular aspect of the Chinese economy appears to have become a major focus as lawmakers meet in Beijing to discuss the nation's five-year plan. In attempting to reduce its dependence on exports and state projects, the nation is determining ways to encourage domestic spending.


3. iShares Gold Trust (IAU)


Although it's off to a quiet start in 2011, gold has once again taken center stage as investors seek out protection from the political tension sweeping parts of the developing world.


Demand for defense has pushed the physically based IAU higher, and last week the fund briefly visited new all-time highs.


I continue to urge investors to view gold ETFs like IAU as a long-term investment. By maintaining exposure to the yellow metal over the long run, investors will be able to weather economic storms on the horizon.


4. SPDR S&P Retail ETF (XRT)


Time and again, U.S. consumers have shown resilience in the face of economic turmoil. This week, a number of data points will provide insight into the state of the nation's consumer class.

From an earnings perspective, teen retailers includingAmerican Eagle Outfitters (AEO) and Urban Outfitters (URBN) will step up to the plate. Meanwhile, on Friday, monthly retail sales are slated to be released.


Rising commodity prices may weigh on the consumer down the road. However, this is an economic component to keep a close watch on.


5.iShares MSCI Sweden Index Fund (EWD)


Europe remains volatile given the ongoing debt crisis facing vulnerable corners of the euro bloc. As EU components such as Spain and Italy continue to combat these headwinds, risk- tolerant investors have turned to nations such as Sweden and Switzerland as a way to access this region from a safer perspective.


For Sweden, the past week provided evidence of the nation's relative stability. After posting strong fourth quarter growth number, the nation raised its GDP forecasts for 2011 to 4.8% from 3.7% previously.


Sweden will likely continue to be fingered as a promising component of the larger European continent and EWD provides investors with catch-all exposure to the nation's marketplace. The index is spread across a basket of over 30 Swedish firms headlined by Nordea Bank, Ericsson (ERIC) and H&M.


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