Prominent companies like Applied Materials (NASDAQ: AMAT), along with their engineers, are being lured to China, reports Keith Bradsher for The New York Times. The Chinese market is thirsting for electricity, cars and assorted other symbols of economic prosperity, and companies are finding that their researchers need to be closer to both factories and consumers. [ETFs to Access the Tech Boom.]

For example, Applied Materials set up its newest solar research lab in Xi’an after estimating that China could produce two-thirds of global solar panels by the end of the year. General Motors (NYSE: GM) has a large and growing auto research center in Shanghai. Intel Corporation (NASDAQ: INTC) has opened semiconductor and server network research labs in Beijing. [Top 10 ETFs Investors Are Trading.]

Western companies are also drawn to China because of its reservoirs of cheap, highly skilled engineers and subsidies offered by many Chinese cities. Xi’an has 47 universities and other institutions for higher learning, which are churning out engineers with master’s degrees who can be hired at $730 a month. [Two ETFs for the Networking Renaissance.]

China is also becoming a hot spot for clean energy, with cutting edge ways to burn coal at a minimum carbon footprint and building thinner solar panels that require less toxic materials to produce.

For more information on the tech sector, visit our technology category.

• Semiconductor HOLDRs (AMEX: SMH): AMAT is 11.7%, INTC is 23.8%

• iShares S&P North Amer Tech-Semicondctrs (NYSEArca: IGW): AMAT is 7.6%, INTC is 8.4%

• Ultra Semiconductor ProShares (NYSEArca: USD): AMAT is 4.2%, INTC is 26.8%; this is a leveraged ETF, so be sure you understand it before you buy [Our Guide to Leveraged and Inverse ETFs.]

Max Chen contributed to this article.

State Street Global Advisors is planning on launching several bond focused ETFs that will join a flood of new bond ETFs hitting the market. The new funds will span both the public and private sectors, and some will be a truly unique twist on the corporate bond space, focusing on specific industries. [Another State Street Offering in the Pipe.]

Oliver Ludwig for Index Universe reports that the planned ETFs are:

• SPDR S&P Agency Bond ETF
• SPDR Barclays Capital Corporate Bond ETF
• SPDR Barclays Capital Corporate Industrial Bond ETF
• SPDR Barclays Capital Corporate Financial Bond ETF
• SPDR Barclays Capital Corporate Utilities Bond ETF
• SPDR Barclays Capital Zero Coupon Bond ETF
  
• SPDR Barclays Capital CMBS ETF

Fixed-income funds have drawn many investors that prefer the types of funds that do well when interest rates are rising. Rates are going to go up again at some point as the economy recovers and business activity resumes. [Why It's Time to Approach Bond ETFs Differently.]

Leveraged ETF provider ProShares is out this week with the first single inverse ETFs offering exposure to China, the U.S. real estate market and the U.S. basic materials sector. The funds seek to provide 100% inverse performance on an index on a daily basis. The new funds are:

• ProShares Short FTSE/Xinhua China 25 (NYSEArca: YXI)
• ProShares Short Real Estate (NYSEArca: REK)
• ProShares Short Basic Materials (NYSEArca: SBM)

For more stories about new ETFs, visit our new ETFs category.

Direxion’s new funds are:

• Daily BRIC Bull 2x Shares (NYSEArca: BRIL)
• Daily India Bull 2x Shares (NYSEArca: INDL)
• Daily Semiconductor Bull 3x Shares (NYSEArca: SOXL)
• Daily BRIC Bear 2x Shares (NYSEArca: BRIS)
  
• Daily India Bear 2x Shares (NYSEArca: INDZ)
  
• Daily Semiconductor Bear 3x Shares (NYSEArca: SOXS)

Many of the ETFs represent a departure from the norm for the ETF provider: the BRIC and India funds are the first to offer exposure to those economies, as well as the first funds Direxion offers that give twice the leveraged or inverse performance on an index. The semiconductor ETFs are the provider’s first to give triple leverage on that sector. [ETFs for Latin America's Recovery.]

The timing of these launches aligns with the increasing investment popularity of both emerging markets – particularly the BRICs (Brazil, Russia, India and China) – as well as the technology sector, which has notched an impressive recovery off the market’s low one year ago. [Why Technology Could Lead in 2010.]

Leveraged and inverse ETFs aren’t right for everyone; read up on how they work and understand the risks before diving in! [Our Guide to Leveraged and Inverse ETFs.]

For more stories about new ETFs, visit our new ETF category.

Dr. Ed Yardeni of Yardeni Research believes that sectors and industries that outperformed and underperformed the market during the first year of the bull market will do so again for this year, writes Josh Lipton for Minyanville. Yardeni says that tech will come out ahead this year and “industry analysts are raising both their 2010 and 2011 estimates as the sector continues to deliver more positive earnings surprises than the other sectors.” [Tech ETFs: A Way to Avoid the Guesswork.]

The tech sector’s top performers have some things in common, such as companies that have big global footprints and strong, clean balance sheets. Additionally, valuations look attractive, tech companies are continuing to put up record revenue numbers and capital expenditure may begin to increase.

Cisco Systems (NASDAQ: CSCO) climbed ahead of news on how the company could help telecommunications companies boost Internet speed to meet growing demand, reports Peter A. McKay for The Wall Street Journal. The news also lifted telecom stocks.

The majority consensus on Wall Street is that a second round of recession isn’t likely, but participants remain skeptical about whether new bets on the markets are justified, considering the strength of the recovery. The Nasdaq is up 83% since the March 9 low of last year.

For more information on the technology sector, visit our technology category.

• PowerShares QQQ (NASDAQ: QQQQ)
• First Trust NASDAQ-100-Tech Index (NASDAQ: QTEC)
• iShares Dow Jones US Technology (NYSEArca: IYW)
• Technology Select Sector SPDR (NYSEArca: XLK)

If you would rather have leveraged tech investments take a look at these. But just know the risks and how they work – leverage isn’t for everyone. [All About Leveraged and Inverse ETFs.]

• Direxion Daily Technology Bull 3X Shares (NYSEArca: TYH)
• Ultra Technology ProShares (NYSEArca: ROM)

For full disclosure, Tom Lydon’s clients own shares of QQQQ.

Max Chen contributed to this article.

Gas has already crept up 5 cents a gallon, and it could go as high as $3 a gallon if those in the know are correct. Oil prices have also increased, to $82 on optimism about the economy, new tensions in oil-producing Nigeria and reports that China is building up its strategic reserves, reports Clifford Krauss for The New York Times. [Energy ETFs: Oil Industry Expands Its Horizons.]

The Nigerian rebel group have resumed attacks on oil production operations, which has diminished Nigerian production by 85,000 barrels a day, or more than 4% of normal output. China is planning on amassing reserves while prices are low, increasing the expectations that China may import as much as 15% more oil this year.

Global crude oil inventories are slowly dwindling, but domestic inventories remain above the five-year average for this time of year. It is expected that OPEC won’t be altering its supplies later this month. [How to Use HOLDRS to Invest in Oil.]

How to play these rising prices? You have an array of options with oil ETFs.

For more information on oil, visit our oil category.

• United States Oil (NYSEArca: USO): Holds futures contracts; watch out for contango, though, because this fund could get hit on the roll. If it’s present, then investigate United States 12-Month Oil (NYSEArca: USL), which is less impacted by the situation.

• United States Gasoline (NYSEArca: UGA): Holds futures contracts; as with USO, watch for contango. There is no 12-month gasoline fund, however.

• SPDR S&P Oil & Gas Equipment & Services (NYSEArca: XES): Holds stock of companies involved in oil equipment. While it won’t correlate with the spot price, it does offer industry exposure and less volatility.

• SPDR S&P Oil & Gas Exploration & Production (NYSEArca: XOP): Tracks companies involved in the exploration and production of oil and like XES, doesn’t correlate with the spot price, but gives good exposure to the industry.

• iShares Dow Jones U.S. Oil and Gas Exploration (NYSEArca: IEO): Like XOP; gives exposure to companies involved in the production and exploration of oil and other energy commodities.

• Ultra Oil & Gas ProShares (NYSEArca: DIG). If you believe those prices are going to continue to go up and you want to maximize your exposure, this is one way to do it. Just be sure you know how leveraged ETFs work before you leap. [Our Guide to Leveraged and Inverse ETFs.]

Max Chen contributed to this article.

The Direxion Long/Short Global IPO Fund (NYSEArca: DXIIX) is a managed mactical fund that incorporates long/short, tactical strategies with exposure to alternative asset classes.

Direxion’s Marketing Director Andy O’Rourke points out that many investors may not be aware that, on a global level, the IPO market is growing. While the U.S. IPO market might be tepid, “If you look globally, it’s a much larger growth rate,” he says.

To put it in perspective, in 2000, there were 386 new issues around the world. Following the burst of the dot-com bubble from 2001-2003, global IPO activity cratered to as few as 59 new offerings per year. But since then, O’Rourke says, it’s been steady growth. In 2009, global IPO activity topped 400 new issues.

O’Rourke says much of the IPO activity these days is taking place in areas like India and the Far East, nations populated by companies that are servicing other companies around the world (think: outsourcing).

On the long side of the fund are China, the United States, Brazil, Hong Kong and Canada. On the short side is also China, the United States and Hong Kong, with Japan and Germany taking the fourth and fifth spots. Direxion looks at each issue individually. [Increased IPO activity? There's an ETF for That.]

The idea behind the fund is the expectation that new issues will outperform in their first year of existence, then underperform in their second to fourth years. After the fourth year, the issue is dropped from the fund. “Looking at the price activity, you do tend to see the pattern of behavior,” O’Rourke notes.

The fund will also use short-selling to reduce overall risk associated with the IPO market.

DXIIX is subadvised by IPOX Schuster, which also provides the underlying index for another IPO ETF, the First Trust IPO Index (NYSEArca: FPX). FPX focuses on U.S. IPO activity. [How the Fund Works.]

The fund will try to capture IPO activity in three stages of life:

• Initial offer under-pricing – IPOs are often priced below the market’s initial expectations.
• Year 1 over-performance – analysts reports for value measurement and exaggerated market expectations may generate high returns.
• Post year one under-performance – many companies struggle to live up to initial expectations.

Why might you be interested in the fund?

• The fund provides diversification through exposure to another asset class.
• It provides a potential hedge against adverse market conditions.
• IPOs are considered a non-correlating asset class.
• IPOs tend to issue cheaply, so they provide a “down” market protection for the first 12 months.
• Tactical management that provides returns through the three phases stated above.
• Exposure to broad, global IPO syndicates.

For more information on the IPO market, visit our IPO category.

Max Chen contributed to this article.

An increasing federal deficit coupled with a large decline in the U.S. dollar may eventually translate into rapid inflation and higher metal prices, while the dollar’s recent strength and higher interest rates could mean that precious metals will drop in value, comments Jonathan Bernstein for ETFZone. [Hedge Inflation With These ETFs.]

That’s why investors need to be prepared to act accordingly. Not all metals have a similar reaction to shifting market conditions.

ETFs offer exposure to precious metals such as gold, silver, platinum and palladium, and base metals like copper, nickel and lead. Precious metals are lightly counter-cyclical, affected by interest rates and the dollar, while base metals are highly cyclical, performing well in a strong economy. [4 Factors Influencing Metals ETFs.]

Commodity ETFs come in a variety of incarnations; which you choose is up to you. It depends on the kind of exposure you want, what kind of risk you’re willing to endure and taxes you’re willing to deal with.

Funds can be physically backed by the metal itself, it can have ownership of futures contracts to buy the metal, it can hold companies involved in the mining and production of a metal. [Copper ETN: Forging Ahead?]

A fund that is backed by the physical commodity has the metal stored in a vault. Investors should note that these funds have storage fees calculated into their expense ratios. Also, physical bullion trades are taxed by the IRS at the collectibles rate of 28% instead of the long-term equity rate of 15%. Investors should still consult their tax experts for specific advice, though. [What's Driving Platinum and Palladium ETFs?]

• SPDR Gold Shares (NYSEArca: GLD)
• iShares COMEX Gold Trust (NYSEArca: IAU)
• iShares Silver Trust (NYSEArca: SLV)
• ETFS Physical Gold (NYSEArca: SGOL)
• ETFS Physical Silver (NYSEArca: SIVR)
  
• ETFS Physical Platinum Shares (NYSEArca: PPLT)
• ETFS Physical Palladium Shares (NYSEArca: PALL)

Funds may also own futures contracts to buy the metal. Contracts are rolled over before expiration, and another contract is purchased in its place. Rolling over contracts generates trading fees. Futures contracts are taxed at a lower maximum rate of 23%.

• PowerShares DB Precious Metals Fund ETF (NYSEArca: DBP)
• PowerShares DB Base Metals Fund ETF (NYSEArca: DBB)
• PowerShares DB Gold Fund ETF (NYSEArca: DGL)
• PowerShares DB Silver Fund ETF (NYSEArca: DBS)
• Ultra Gold ETF (NYSEArca: UGL)
  
• ProShares UltraShort Gold (NYSEArca: GLL)
• ProShares Ultra Silver (NYSEArca: AGQ)
• ProShares UltraShort Silver (NYSEArca: ZSL)

Many metals ETFs give investors exposure to the companies that mine and produce the metals. While such funds don’t give you access to spot prices, they have their own advantages. One big one is that mining companies can continue to do well if a commodity’s price steps back, but remains far above the cost of production. Such funds also lack the big day-to-day swings that have a tendency to vex futures- and physically-backed metals ETFs.

• SPDR S&P Metals & Mining (NYSEArca: XME)
• Market Vectors Gold Miners (NYSEArca: GDX)
• Market Vectors Junior Gold Miners (NYSEArca: GDXJ)
• EGS DJ Emerging Markets Metals & Mining Titans (NYSEArca: EMT)

Lastly, funds may offer exposure through notes or exchange traded notes (ETNs). ETNs are taxed by the long-term equity rate of 15%. ETNs are unsecured debt backed by the full faith and credit of the issuer. They have no tracking error. [ETNs: Everything You Want to Know.]

• ELEMENTS Rogers International Commodity Metal ETN (NYSEArca: RJZ)
• E-TRACS UBS Bloomberg CMCI Industrial Metals ETN (NYSEArca: UBM)
• iPath DJ AIG Industrial Metals ETN (NYSEArca: JJM)
• PowerShares DB Base Metals Long ETN (NYSEArca: BDG)
• iPath AIG Copper (NYSEArca: JJC)
• iPath DJ AIG Lead (NYSEArca: LD)
• iPath DJ-AIG Aluminum (NYSEArca: JJU)
• iPath DJ AIG Nickel (NYSEArca: JJN)
• E-TRACS UBS Platinum (NYSEArca: PTM)
• iPath DJ AIG Platinum (NYSEArca: PGM)
  
• PowerShares DB Gold Short ETN (NYSEArca: DGZ)
• E-TRACS UBS Short Platinum ETN (NYSEArca: PTD)
• PowerShares DB Base Metals Double Long ETN (NYSEArca: BDD)
• PowerShares DB Base Metals Double Short ETN (NYSEArca: BOM)
• PowerShares DB Base Metals Short ETN (NYSEArca: BOS)
• PowerShares DB Gold Double Long ETN (NYSEArca: DGP)
  
• PowerShares DB Gold Double Short ETN (NYSEArca: DZZ)

For more information on metals, visit our precious metals category or base metals category.

For full disclosure, Tom Lydon’s clients own shares of XME.

Max Chen contributed to this article.

Greece may try to float a small bond offering, which comes on the heels of some kind of “good news” in  regards to taxation and spending, remarks Jon Weisenthal for Business Insider. Weisenthal expects that speculators will be caught by surprise, the announcement will be timed to coincide with other “support” from the rest of the European Union, which could cause the euro to appreciate, and Greece would then dish out its debt offering.

For now, though, the euro is declining. While experienced currency traders might gravitate toward using a forex account to short the currency directly, the average currency trader may find it easier to use short euro ETFs, comments Ron for Benzinga. [ETFs Lag on Eurozone Debt.]

One such option is the UltraShort Euro ProShares (NYSEArca: EUO). EUO tries to provide twice the daily inverse performance of the euro against the U.S. dollar. The reasoning goes that the euro is falling as a result of Greece and other E.U. countries are failing to service large public debts and may have to default.

If Greece were to be bailed out, the euro may gain some strength, but other members in the eurozone have an equally poor fiscal outlook. Countries like Portugal, Ireland and Spain may pose problems for the euro.

But wait a minute. Before you dive in and buy a short ETF, understand how they work, what the risks are  and decide whether they’re actually right for you. [Leveraged and Inverse ETFs: What You Should Know.]

For more information on the euro, visit our euro category. Or, take a look at our ETF Trends’ Guide to Currency ETFs. Other euro currency ETFs and ETNs include long, double long and double short options.

• Market Vectors Double Long Euro ETN (NYSEArca: URR)

• Market Vectors Double Short Euro ETN (NYSEArca: DRR)

• Ultra Euro ProShares (NYSEArca: ULE)

• CurrencyShares Euro Trust (NYSEArca: FXE)

• WisdomTree Dreyfus Euro (NYSEArca: EU)

Read the disclaimer, as Tom Lydon is a board member of Rydex|SGI.

Max Chen contributed to this article.

Rising interest rates and the threat of inflation has bond investors, for the most part, fleeing the scene.  John Spence for MarketWatch says the following types of funds are letting investors bet against the longer-dated Treasury shares, which could get hit as the Federal Reserve hikes rates in the future:

• ProShares UltraShort 20+ Year Treasury (NYSEArca: TBT)

• Direxion Daily 30-Year Treasury Bear 3x (NYSEArca: TMV)

• ProShares UltraShort 7-10 Year Treasury (NYSEArca: PST)

Last week, the Federal Reserve upped the emergency loan rates they charge banks. While these rate hikes don’t affect consumers or corporations, the move did put investors on alert for an eventual reality: someday, record low rates are going to go back up. When they do, billions that have been stashed in Treasuries during the financial crisis could be lost. Enter short Treasury ETFs. [Leveraged ETFs Are Popping Up in Many Varieties.]

Rate hikes could be far off, though. Federal Reserve Chairman Ben Bernanke reiterated yesterday that the central bank wouldn’t raise them until the economy was on firmer ground.

Leveraged and inverse ETFs are not for everyone. They’re meant to reflect the daily moves of the market; to hold them longer is to risk them veering further away from their benchmarks. This effect is heightened in volatile markets. [Everything You Need to Know About Leveraged and Inverse ETFs.]

For more stories about leveraged ETFs, visit our long-short ETF category.

As stocks were still rallying back in October, James B. Stewart for The Wall Street Journal says that it was a prudent time to hedge some of his exposure by investing in a “short” ETF, ProShares UltraShort S&P 500 (NYSEArca: SDS), which tries to double the inverse of the S&P for a single day. The S&P 500 was at 1063. Stewart argues that the market was overdue for a correction, with stocks rising nearly 57% without any corrections of 10% or more since March. [Everything You Need to Know About Leveraged and Inverse ETFs.]

“I’m deliberately calling this an experiment, not a recommendation. I suggest that conservative investors let me be the guinea pig,” adds Stewart.

The correction didn’t materialize, and by Christmas, Stewart lost 13% while the S&P 500 gained 6%. He then thought that the market was more ripe for a correction and consequently purchased ProShares UltraShort QQQ (NYSEArca: QID), which tries to double the inverse of the Nasdaq 100 for a single day. The Nasdaq was at 2253.

On Feb. 5, the Nasdaq dropped to 2100, which produced gains of over 8% in Stewart’s QID investment. The S&P fell to 1063 the previous day. The standard 10% correction never occurred and economic indicators were coming out positive. Stewart decided to call it quits and bailed out with a modest gain in QID that offset some losses from SDS. Factoring in transaction costs, he pretty much came out even.

Stewart observes that selling short works if an investor knows when the market is overvalued and then know when a correction has run its course. The odds of knowing both are rather low.

Give him a pat on the back for conducting this experiment.

It’s great to see media people talk about their experiences and are honest about what they did and learned. The fourth quarter was a good one for the markets – it’s tough to make money shorting in a market like that. Stewart also lacked an exit strategy – something any reader of ETF Trends will recognize as a no-no! [Stop Predicting, Start Trend Following.]

For more information on inverse ETFs, visit our long-short category.

Max Chen contributed to this article.