5 ETFs to watch this week

Funds tracking the Japanese economy, corn prices and the euro will be in the spotlight for the next few days.

By TheStreet Staff Jul 5, 2011 10:26AM

Image: Stock investor (© Tom Grill/Corbis)By Don Dion, TheStreet

 

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

 

1. iShares MSCI Japan Index Fund (EWJ)

 

The Japan-tracking EWJ spent much of the month of June treading water, subdued below its 50-day moving average. At the close of the month, however, the fund caught a break. Thanks to a three-day ascent during the middle of last week, shares of EWJ managed to recapture levels seen at the start of May.

 

In the coming days, as we take our first steps into the second half of 2011, it will be interesting to see if EWJ can capitalize on last week's strength. The Japanese markets still have ample ground to cover before the fund regains the highs witnessed before the devastating earthquake and tsunami. Along the road to recovery, expect headwinds to persist.

 

2. Teucrium Corn ETF (CORN)

 

Corn prices took a heavy hit at the end of last week after the release of the U.S. Department of Agriculture's crop report. As a result, the futures-tracking CORN crumbled, retreating to levels last seen in mid-March.

The USDA found that farmers had planted approximately 92.3 million acres of corn during the spring planting season, far outpacing the 90.7 million acre estimate. The Associated Press notes that this is the second-largest crop in close to 70 years.

 

Agriculture will likely continue to be a popular destination for investors looking to track global market growth. Gaining stable access, however, may prove tricky. Investors looking for a stable long-term bet on food should turn to the broad futures-backed PowerShares DB Agriculture Fund (DBA) or the equity-tracking Market Vectors Agribusiness ETF (MOO).

 

3. iShares MSCI EMU Index Fund (EZU)

 

The global market received some welcome relief last week after reports that progress had been made in the ongoing Greece sovereign debt saga. For weeks, analysts, investors and market commentators have had their eyes fixed on the EU as member nations debated whether to provide the troubled nation with a second bailout.

 

EZU, which allows investors with exposure to the currency bloc, witnessed an impressive four-day winning streak over the past week. While this is encouraging, I urge cautious investors to avoid taking a chance here. There will likely be trials ahead for the region. Those desperate for Europe exposure should turning to non-EU nations such as Sweden and Switzerland.

 

4. iShares Barclays 20+ Year Treasury Bond Fund (TLT)

 

Long-term U.S. treasury bonds took a heavy hit last week as Greece's debt concerns eased, the markets marched higher and investors reacted to the end of QE2.

 

With the Federal Reserve's $600 billion bond-buying program wrapped up, it will be interesting to see what is in store for this corner of the bond market. Aside from TLT, investors interested in the treasury story may also want to keep their eyes on the ProShares UltraShort 20+ Year Treasury ETF (TBT). This fund is designed to provide double the inverse daily performance of TLT.

 

5. SPDR S&P 500 ETF (SPY)

 

The broad U.S. marketplace closed out the first half of 2011 with a solid winning streak. The multiple days of gains helped SPY recover much of the ground lost during the May-June sell-off.

 

Shortened trading weeks can be tricky, so investors will want to use caution.

On July 11, Alcoa (AA) is scheduled to report its quarterly performance, kicking off earnings season. There are plenty of hurdles still facing many regions of the globe, but it will be interesting to see if anticipation for this exciting time of the year will overshadow headwinds during the week ahead.

 

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