Power Shift Seems to Agree With Russia ETF

On May 7, Vladimir Putin stepped down and Russia's new president became Dmitry Medvedev - is it any coincidence that in one day, the Russia exchange traded fund (ETF) rose 4.4%?

Market Vectors Russia (RSX) seems to be a beneficiary of the surge in energy prices in particular, as 43.1% of the fund is allocated in the sector. It's up 6.4% year-to-date.

Foreign investors, attracted by the record-high oil prices, are turning a blind eye to the country's expulsion of U.S. diplomats and threats of a war with Georgia, reports Peter Apps for Reuters. The expulsions were ordered on April 28 after the United States expelled three diplomats earlier in April. The back-and-forth is bringing back Cold War memories.

Some investors might be deterred by Russia's issues, especially when compared with other emerging markets such as Brazil, which has the growth without the political risks. And those investors who are concerned with the oil and energy sector in Russia are focusing on other sectors such as construction and retail.

An ETF is a good way to get exposure to several sectors - the diversification means you could potentially benefit from any growth, while avoiding too much risk if it doesn't pan out.

Exposure to Russia can also be had through the SPDR S&P Emerging Europe (GUR), which also contains exposure to Poland, Turkey, the Czech Republic and Hungary. Year-to-date, it's down 5.2%.

A closed-end fund (CEF) contains Russia exposure, too: the Central Europe and Russia Fund (CEE), which is down 5.1% year-to-date. It holds 27.7% of the country.

For full disclosure, some of Tom Lydon's clients own shares of RSX.

BRIC ETFs Were Anything But In April

BRIC exchange traded funds (ETFs) showed themselves to be solid in April. Investor interest and enthusiasm for the funds has peaked over the past several years, with outstanding sector-leading performances in 2007.

Richard Widows for The Street researched the BRIC ETFs for the month of April, some of which posted impressive performance numbers.

SPDR S&P China (GXC) was up 17.97% in April, and was the top performer for the month. iShares FTSE/Xinhua China 25 Index (FXI) advanced 17.5% with a net $6 billion in assets.

Brazil fared well with a pair of ETFs: iShares MSCI Brazil Index (EWZ)  up 17.3% and HOLDRs TeleBras (TBH) up 14.2% in April.

First Trust ISE Chindia (FNI) was up 16.6%, as a blend of China and India, and Claymore/BNY BRIC (EEB) was up 11.1%. An honorable mention was given to iPath MSCI India Index (INP), as the ETN gives a hard-to-access passage to India. The fund rose 7.1% in April.

There's still more BRIC exposure to be had, though, both in single-country and broad-based form.

• Market Vectors Russia (RSX), up 3% in April
• SPDR S&P BRIC 40 (BIK), up 9.7% in April
• iShares MSCI BRIC Index (BKF), up 9.8% in April

For full disclosure, Tom Lydon's clients own shares of INP.

Mexico ETF Goes Great With Chips and Salsa

What better way to celebrate Cinco de Mayo than with a heaping bowl of guacamole, a round or three of margaritas and a Mexico exchange traded fund (ETF)?

The timing is good, too: the iShares MSCI Mexico (EWW) has been gathering steam lately, going up 11.3% since March 10. Year-to-date, it's up 5.8%.

In the last decade, Mexico has delivered annualized returns of 16.99%, handily outpacing other single-country ETFs. The fund is heavily concentrated in the wireless sector, with 25.1% of the fund given to America Movil (AMX), the largest cell phone operator in Latin America.

Today, America Movil stock rose along with some mining companies, Reuters reports. Shares of Grupo Mexico, one of the world's largest producers of copper, shot up in trading today, as well. Grupo Mexico is 5% of EWW.

Mexico has also been given a lift via rising oil prices as the world's sixth-largest crude exporter. Futures rose past a record $120 a barrel today, says John Wilen for the Associated Press. However, over the weekend gas prices fell more than a cent. Don't spend those big savings all in one place.

A View of ETFs In An Obama White House

If Barack Obama were to win the election for presidency this November, what would happen to the investment world, particularly exchange traded fund (ETF) investors?

Awhile back, we talked about funds that could benefit in a McCain win, as well as an overall Democratic win.

Jonathon Bernstein for ETFZone believes that the most immediate and powerful impact of an Obama win would be the within the area of foreign policy. He could help to ease tensions with the Middle East and Venezuela, which would in turn calm oil prices and shift the overall momentum of the markets. Currently, oil is at all-time highs, so just the thought of Obama in the White House would send oil lower in funds such as Unites States Oil (USO).

The dollar might end up in a stronger state, as a major reason the dollar fell against the euro is oil imports. If the United States were to import less oil, or or pay less for the oil it does import, we might see an improved trade deficit, thus upping the demand for U.S. dollars. CurrencyShares Euro Trust (FXE) would reflect the dollar-euro ratio.

Obama says he would keep tax cuts for the middle class, and doesn't support Bush's tax cuts for the wealthy. Both those and his dividend tax cut expire in 2010. Dividend-focused ETFs such as iShares Dow Jones Select Dividend Index (DVY) or the State Street SPDR Dividend (SDY) could be vulnerable if the tax cuts aren't renewed.

Obama also supports working to put an end to global warming and a push to reduce U.S. carbon emissions by 80% by 2050. He also supports ending the ban on stem cell research.  Both iShares Nasdaq Biotechnology (IBB) and the WildersharesClean Energy (PBW) could experience positive movement if these issues are addressed.

Currency ETF Moves Depend on Many Factors

One reader wanted to know about foreign currency exchange traded funds (ETFs). Thanks to ETFs, foreign currency is a market the average, everyday investor can get exposure to an area that previously wasn't accessible to them.

The rise and fall of currency has a lot to do with several factors, according to George D. Lambert for Investopedia. The value is impacted by economic growth, government debt levels, oil and gold prices, and more.

Just look at what happened recently in the United States: gross domestic product (GDP) slowed, government debt rose, oil and gold prices spiked. Suddenly, our dollar was hitting record lows against the yen and euro.

Currency ETFs replicate the movements of the currency in the exchange market either by holding currency cash deposits in the currency that's being tracked, or by using futures contracts on the underlying currency.

Currency ETFs can either track the specific currency you'd like, or a group of them, as in the case of the DB G10 Currency Harvest Fund (DBV).

How they operate is cut-and-dry: when you sell it, if the currency has appreciated against the dollar, you'll earn a profit. If the currency has dropped relative to the dollar, it's a loss. Foreign currency ETFs are bought and sold just like regular ETFs, throughout the day.

Keep an eye on the dollar, though: it strengthened yesterday, reports Madlen Read for the Associated Press. Dropping oil prices and the Dow's close above 13,000 for the first time since Jan. 3 are viewed as signs of optimism.

The options investors have for currency ETFs have exploded. Among the many choices:

• CurrencyShares Australian Dollar Trust (FXA)
• WisdomTree Dreyfus Brazilian Real Fund (BZF)
• ELEMENTS British Pound (EGB)
• CurrencyShares Swedish Krona Trust (FXS)

Depending on your feeling about the dollar - will it continue to strengthen, or is this just a temporary lift? - there's also the PowerShares DB US Dollar Index Bearish (UDN) and the PowerShares DB US Dollar Index Bullish (UUP).

Read the disclosure, as Tom Lydon is a board member of Rydex Funds.

How to Invest in Single-Country ETFs

Exchange traded funds (ETFs) that track a single country have have been a boon to many long-term investors. They allow investors to reduce their exposure to specific regional disruptions, such as the recent credit crunch, and they up the exposure available to countries that are profiting more than the United States or other distressed nations.

Global growth has been outpacing that of the United States' for some time now. Evidence of this can be seen just by looking at the performance of the S&P 500: year-to-date, it's down 5%. Its five-year average return is 10.6%, and the ten-year average is 3.9%.

Investors can't be blamed for considering looking abroad for places to put their money. Single-country funds offer more flexibility than mainstream equities, says Alan Farley for The Street.

Overnight gaps that can occur in single-country ETFs can subject them to volatility.

iShares MSCI Mexico (EWW) is an example, as it fell nearly 3% on April 25 because of weak earnings from America Movil (AMX). However, over the past decade, EWW has benefited from Mexico's steady growth in the last decade. Year-to-date, the fund is up 3.6%.

Other ETFs with a strong year-to-date performance include iShares MSCI Brazil (EWZ), which is up 12% and has an annualized return of 55.4% over the last five years;  iShares MSCI Taiwan Index (EWT), up 10.2% so far this year, with an annualized return of 18.6% over the last five years.

Brazil was upgraded yesterday by Standard & Poor's to "investment grade."

These uptrends over time with single-country ETFs are all well and good (hindsight is 20/20, right?), but what if you had bought Brazil in November and sold it in January? You would have been down 50%.

But each single country needs to be evaluated on its own merits. Not all of them are going to go up. When it comes to these funds, educate yourself and monitor the trends closely. Have your sell points set for each, letting it go when it either drops below its 200-day moving average or 8% off its high.

If you stick to the plan, hopefully you will achieve your goal of doing well on the uptrends while avoiding the volatility that occurs from time to time.

Brazil, Latin America ETFs Soar After Investment Upgrade

Brazil's exchange traded fund (ETF) got a big boost after Standard & Poor's rated the country to "investment grade."

The country's continually growing economy and debt reduction are cited as two reasons for the upgrade, reports Rob Wherry for Smart Money.

Brazil once had a volatile economy, but is now enjoying some newfound stability, says the Associated Press. Experts are predicting that the country's typical boom and bust economic cycles are a thing of the past.

The upgrade was hard-earned. In the 1980s, the country defaulted on its debt and declared a moratorium on payments. Now it's booming thanks to exports such as beef, iron ore and soy. Foreign investment is on the rise, companies are making record profits and consumers are taking out loans to purchase cars and homes.

S&P Credit Analyst Lisa Schineller says Brazil appears to be on track for sustained economic growth between 4% and 4.5% this year.

iShares MSCI Brazil (EWZ) and iShares S&P Latin America 40 (ILF) rode the wave, gaining 7.2% and 4.4% yesterday, respectively.

For full disclosure, some of Tom Lydon's clients own shares of ILF.

BRIC ETFs Have Many Access Points for Investors

A reader wrote in recently wanting to know more about BRIC and the related exchange traded funds (ETFs). We're here to help!

BRIC stands for four of the fastest-growing emerging markets out here: Brazil, Russia, India and China. In 2007, these countries delivered some of the biggest returns of any ETFs or exchange traded notes (ETNs) around. So far for 2008, BRIC ETFs and some of the single country funds have been fairly quiet.

But make no mistake: these countries are still growing, and could have plenty to offer down the line.

Mexico and Its ETF Has One Caliente Decade

Nine out of the top ten exchange traded funds (ETFs) with high yearly returns actually tracked overseas markets, with one of the hottest markets and funds just south of the border. That's according to Lipper data.

iShares MSCI Mexico (EWW) gained an annualized 16.99% through April 17, compared to the S&P 500 which returned 3.88% over the same time period.

Jesse Emspak for Investors Business Daily reports that the fund tracks the Bolsa Mexicana, the country's stock exchange. EWW is concentrated, with 25% tracking America Movil (AMX). The company is the largest wireless provider in Latin America, and serves 147 million customers in 16 different countries.

Like so many Latin economies, Mexico has had a steady, modest growth in the past 10 years.

The country is exporting more to Europe and Asia as trade ties have solidified and the peso has fallen alongside the dollar.

Foreign Currency ETF Offerings to Pour In Next Month

Exchange traded fund (ETF) providers Dreyfus and WisdomTree are teaming up to offer five actively managed foreign currency ETFs next month.

They will include the WisdomTree Dreyfus Euro Fund, Japanese Yen Fund, Indian Rupee Fund, Chinese Yuan Fund and the Brazilian Real Fund. These will be the first of 12 to be launched under the WisdomTree Dreyfus banner. Two others include two U.S. current income funds, reports Mariana Lemann for Ignites.

Later this year, more funds will launch and cover the Australian dollar, British Pound sterling, Canadian dollar, New Zealand dollar, South African rand and South Korean won. Several of these funds will be a first in currency ETFs.

When they launch, they'll join a growing lineup of both currency ETFs and exchange traded notes (ETNs), including:

• CurrencyShares Euro Trust (FXE)
• CurrencyShares Japanese Yen Trust (FXY)
• Market Vectors Indian Rupee (INR)
• Market Vectors Chinese Renminbi (CNY)
• PowerShares DB G10 Currency Harvest (DBV)

Read the disclosure, as Tom Lydon is a board member of Rydex Funds.

Gold ETFs Are the Squeaky Wheels, But Other Metals Might Deserve Some Grease

Gold and its exchange traded funds (ETFs) are real attention hogs. Sure, the metal is pretty to look at. It's shiny. But it's also being outperformed by other decidedly less sexy metals.

streetTRACKS Gold Trust (GLD) and iShares COMEX Gold (IAU) are not too shabby: they're up year-to-date by 6.3% and 5.7%, respectively.

That's all well and good, but consider:

• Market Vectors Steel (SLX) is up 14% year-to-date
• iShares Silver Trust (SLV) is up 12.7% year-to-date
• PowerShares DB Base Metals (DBB) is up 17.2% year-to-date

So, why does gold get the lion's share of the headlines, even as it's retreated from record prices? It dipped below $900 on Thursday, falling almost 15% off those records, reports Atul Prakash for Reuters. The metal rose slightly today but it's expected that more downward pressure lies ahead, as some concerns about the credit crisis have eased.

Growth in emerging markets is fueling much of the demand for steel and other metals with industrial applications, such as silver and copper (futures for which are held in DBB, along with aluminum and zinc).

Yesterday, we noted that China has doubled its number of steel factories in the last few years. Silver is scarce, as well, with dealers paying a premium over the spot price. A strike at a Chilean copper mine run by the world's largest copper producer also raised concern that prices will increase as supplies fall, reports Claudia Carpenter for Bloomberg.

For full disclosure, some of Tom Lydon's clients own shares of GLD.

Oil Prices May Get Worse; Steel and Natural Gas ETFs Are Keeping Pace

The price of oil has slipped some over the last few days, but it's projected to soar even higher - what will it mean for its exchange traded funds (ETFs)?

The reports on fuel got more dismal this morning, as many wonder just how much worse it's going to get. According to an energy report from the Canadian Imperial Bank of Commerce today, oil could hit $225 a barrel by 2012.

Cars are blamed for the continually rising prices: 90% of the demand growth in the last few years has gone to transportation. Car sales globally soared last year, growing 60% in Russia, 30% in Brazil, 20% in China. Sales were flat in Europe and dropped in the United States.

Meanwhile, the oil ETF isn't the only one performing. Steel and natural gas are nothing to turn up one's nose at, either. Gary Gordon for ETF Expert reports that funds for both of the commodities have at least kept pace with United States Oil (USO), if not leaving it in the dust.

In the last month, USO is up 18.6%. Year-to-date, it's up 25.6%. Not too shabby.

United States Natural Gas (UNG) is blowing right past oil, though: it's up 20% in the last month, and 45.2% year-to-date. Market Vectors Steel (SLX) is keeping up: it's up 17.9% in the last month and 17.6% year-to-date.

The question on everyone's minds is whether the U.S. slowdown will eventually catch up to the global markets and put the brakes on demand for these commodities. Gordon says it's possible for some commodities, but he doesn't see steel demand slowing. In China, the number of steel factories has doubled in the last five years.

Global demand for natural gas is also high, but the supplies are plentiful. That begs the question: why has the price been rising? It all traces back to the price of crude oil; it's so expensive that natural gas is one of the alternatives under consideration. It's the cleanest burning carbon-based fuel (unlike coal), and cars powered by natural gas are getting attention from major car makers such as Honda.

Do you find it daunting to focus on a single commodity? Another option is picking a fund diversified over several commodities, such as the Dow Jones Total Commodity Index ETN (DJP) or the iShares S&P GSCI Commodity-Indexed Trust (GSG), which is allocated about 67% in energy, 16% in agriculture, 7% in industrial metals, 7% in livestock, and 3% in precious metals.

Silver, Base Metals ETFs Reflecting Strong Demand

Demand for silver is on the rise and it's reflected in its exchange traded fund (ETF).

Gene Arensberg for Resource Investor says the rise in demand is evident because the paper silver market isn't reflecting popular demand. The COMEX paper silver market is related to, but different, from the physical one in that it deals exclusively with very large, average 1,000-ounce "good delivery bars," and each futures contract covers the delivery of five of those bars.

The physical market is every coin and bullion shop and a range of other silver products.

The scarcity of the metal is evident now, Arensberg says, because dealers are paying higher than normal premiums, evidence of an immediate need for the metal. This means that current inventories are insufficient to meet the demand at the prevailing spot price. Some dealers are paying premiums as much as $1.85 over the spot price - costs that will be passed on to their silver-buying customers.

The iShares Silver Trust (SLV) has benefited from demand for the metal. Year-to-date, the fund is up 17.7%.

PowerShares DB Base Metals (DBB) is trading higher today, lifted by a strike against Chilean copper miner Codelco, which sent futures for the metal upward. Metals were also stronger because of the weaker dollar and May oil hitting $119.90 a barrel, reports Allen Sykora for Dow Jones Newswires. DBB is up 15.6% year-to-date.

Commodities, Natural Resources Keep Chile ETF On Fire

In these commodity-crazy times, Chile and its exchange traded fund (ETF) might be something to think about.

The iShares MSCI Chile (ECH) launched on Nov. 20, and it's been up 14.4% since then. Year-to-date, it's up 11.5%. Chile is a commodity-based country and it is a surplus country with far less moving parts than in the U.S., says Roger Nusbaum for Seeking Alpha. Chile, in particular, has copper to spare. The metal is used in every major industry and growth in emerging markets is fueling demand for it.

Another perk about the Chilean economy is that the social security is privatized, so the demand for Chilean equities is consistent. Chile's economy has an attractive position now as only 15% of its exports go to the United States, so the health of the U.S. economy isn't a significant factor.

Brazil ETF Benefits From Economics and Agriculture

As exchange traded fund (ETF) investors look across the globe for investment opportunities, its hard to not take a second look at Brazil.  The economic leadership has enabled the country to grow and attract new capital, reports Mike Paulenoff of MarketWatch.  In 200, Brazilian companies were the second-largest source of foreign direct investment among developing countries.  The ETF representing the country, iShares MSCI Brazil (EWZ), has been a top performer.  Up 75% last year, and up 8.8% this year.

According to the Economist, Brazil's economy has grown an average of 4.5% since 2004.  When compared to other fast-growing economies, such as Russia, India and China, there are some differences, which give the country an edge.  The Economist notes that the divide between the city and countryside isn't very threatening.  With a multi-party democracy and freedom of expression, social change is easier to negotiate.  Brazil doesn't have the aggressive nationalism that can be seen in the other countries.  Brazil has also faced and dealt with inflation and debt.

As agricultural products continue to rise, Brazil benefits.  They produce and export a large portion of the world's beef, orange juice, soy beans, sugarcane and coffee.

If Investment Remains Solid, Infrastructure ETFs Could Gather Strength

An exchange traded fund (ETF) can be a better proxy for a sector than a single stock. It takes the guesswork right out of investing.

Diversification is another element that is added when using ETFs instead of a single stock within a portfolio. An example is the GE (GE) stock that missed its numbers by a long shot late last week. While media has been a weak performer so far this year - PowerShares Dynamic Media (PBS) is down 10.4% year-to-date - and the financials are tough, there could be other reasons to own GE. The company, after all, wears many hats.

How about infrastructure?, asks Roger Nusbaum for Seeking Alpha. The infrastructure sector can cover a wide range of things, including roads, airports, utilities, information technology and other channels of communication. Breakdowns in some of these areas can lead to major disruptions in a country, as seen when China experienced a record snowfall this winter.

Globally, billion upon billions will be spent on infrastructure over the next decade or two. It is reasonable to assume that stocks in this sector will do well, wait until these funds move back above their trend lines before diving in. Countries and regions such as South Africa, Latin America and China are making infrastructure improvements a particular focus in the coming years.

Build up your portfolio's inner strength with:

• iShares S&P Global Infrastructure Index (IGF), year-to-date down 10.1%
• SPDR FTSE/Macquarie Global Infrastructure 100 (GII), year-to-date down 5.8%

Sugar Might Sweeten Agriculture ETF Performance

Sugar is one commodity whose price remains relatively low when compared with historic highs, but it may not remain that way for long, leaving room to grow for exchange traded funds (ETFs).

Take Baltimore's famous Berger cookies, the price of which one woman recently balked at: $4.59. We can personally attest to the worth-it-ness of that price. The cookies are simple: eggs, milk, sugar, flour and cocoa for that delicious mound of chocolate frosting on the top. Really, you should try them.

The price of all those ingredients has soared in recent months - except for sugar. In "real" terms, the price of sugar has been dirt cheap since the late 1980s, reports Graham Summers for Seeking Alpha.

Blame much of it on a bad reputation: sugar rots your teeth, makes you fat and makes your kids swing from the chandeliers.

But the populations of other countries are beginning to get a sweet tooth as they start eating more like we do (heaven help them), contributing to a demand for sugar that has increased 15% since 2002. Demand is beginning to outpace production: consumption has risen 4%, production has risen 1%.

The biggest sugar consumers per capita are, in order: Brazil, Mexico and Australia, according to Daniel Workman for Suite 101.

The London Stock Exchange has a sugar ETF, ticker symbol SUGA. In the United States, there is sugar futures exposure to be had in the PowerShares DB Agriculture (DBA).

Copper and Other Resources Enrich Chile's ETF

With a reputation as one of the world's most economically progressive free market-focused nations in Latin America, the global commodities market could take Chile's exchange traded fund (ETF) to new levels.

The country's economy has grown from ties to international markets, and many are pondering if the U.S. slowdown will affect the country's continued growth.

Chile emerged from a recession in 2000, reports Don Dion for Seeking Alpha, and since then it's experienced hearty growth. In 2007, its economy grew 5.1%. A similar rate for 2008 is projected.

The country benefits from a rich supply of natural resources, especially copper; it produces one-third of the world's supply. In addition to that, it trades fish, wine, pulp and paper products, fruits and chemicals. Only 15% of the country's exports go to the United States. It's far more reliant on trade with Asia.

On the downside, Chile could be on the brink of an energy crisis, caused primarily by a drought and a natural gas shortage. However, two of the iShares MSCI Chile (ECH) top holdings, the National Electric Company (EOC) and Enersis (ENI), could benefit. They appear to be positioned to produce enough power to take advantage of the higher prices.

So far this year, ECH is up 11.3%.

Tom Lydon Talks ETFs on Fox Business

Tom Lydon appeared on Fox Business Network earlier today with anchor Cheryl Casone. Tom discussed hot ETFs in Asia and Latin America as well as poorly performing ETFs in the retail sector. Video of Tom's segment appears below:

China's Inflation Creates More Opportunity For Other Emerging Market ETFs

China is facing an inflationary trend, and exchange traded funds (ETFs) from competing countries might be able to gain an edge against one of their biggest competitors. Thus far, Chinese growth has relied upon low prices with high top-line sales growth. Low-cost Chinese imports allowed a way to keep inflation at bay.

Carl Delfed for Forbes says the deflationary impact of China on world markets is now becoming an inflationary red flag with implications for global investors. Wages have begun an upward climb, energy is expensive and food prices and demand are exploding. The Chinese Consumer Price Index (CPI) was up 8.7% in just one year.

Delfeld recommends a lean toward countries that are net exporters of commodities instead of net importers like China. iShares MSCI Brazil (EWZ) or the iShares MSCI Hong Kong (EWH) present better opportunities than the iShares FTSE/Xinhua China 25 Index (FXI) ETF.

China's inflationary pressures will create opportunities for other emerging market countries to pick up the slack, such as India. India has two ETFs right now: the PowerShares India (PIN) and Wisdom Tree India Earnings (EPI).

This is an ever-evolving situation, so keep an eye on it. Once these areas head above their trend lines, they could be worth a look.

Mexico's ETF and Economy Are Worth Some Celebratory Margaritas, With Salt

Experts have warned that Mexico could be the hardest hit of the Latin American countries if the United States enters a full-blow slowdown, causing exchange traded fund (ETF) investors to be cautious.

So far, though, the Mexican economy hasn't shown signs of slowing. The central bank governor said industrial output and investment is expected to remain at healthy levels. Easter, a major holiday in the country, arrived early this year. That means first quarter numbers might be slightly off when compared with the previous time period in 2007.

Many investors in Mexico believe the central bank will make two interest rate cuts during the second half of the year, report Noel Randewich and Alistair Bell for Reuters. However, a recent inflation spurt has given them less room to move. Growth for the Mexican economy this year is expected to hover around 3%, compared with 3.3% last year. Mexico sells 80% of its exports to the United States, so it's a country that is heavily dependent on activity here.

So far, the iShares MSCI Mexico Index (EWW) has been benefiting from Mexico's continued strength. Year-to-date, it's up 10.4%.

Playing the Waiting Game With ETFs

  Some believe we're in a full-blown recession, but no matter what they believe, exchange traded fund (ETF) investors shouldn't panic.

Chris Fichera for Consumer Reports suggests staying put and weathering the storm, while making some tweaks to your portfolio:

• While he does suggest that large-caps are attractive and relatively expensive, it's actually the small- and mid-caps that have been outperforming in the last two weeks. Large-caps are up about 1.7%, mid-caps are up about 2.9% and small-caps are up about 5%. There are a variety of small- and mid-cap funds out there, among them:
  • iShares Russell 2000 Growth Index (IWO)
  • iShares Russell 2000 Value Index (IWN)
  • Vanguard Small Cap Value (VBR)
  • iShares S&P MidCap 400 Value Index (IJJ)
  • PowerShares DWA Technical Leaders (PDP)

• International is still attractive. Europe and Japan are slowing down, but there are still emerging markets out there that are growing rapidly, with still more room to grow. Emerging markets can be volatile, so having an exit strategy here is paramount.
  • iShares MSCI Spain (EWP), up 10.3% since March 10
  • iShares MSCI Malaysia (EWM), up 10.5% since March 10
  • iShares MSCI Mexico (EWW), up 8.3% since March 10

• Go with short- or intermediate-term bonds, as long-term bonds don't have the most attractive yields right now. They would also feel the effects if the Federal Reserve were to cut interest rates further.
  
  • SPDR Lehman Short Term Municipal Bond (SHM)
  • iShares Lehman MBS Bond (MBB)
  • SPDR Lehman Aggregate Bond (LAG)
  • iShares Lehman Intermediate Credit Bond (CIU)
  • iShares Lehman Government/Credit Bond (GBF)
  • Market Vectors-Lehman Brothers AMT-Free Short Municipal Index ETF (SMB)
  • PowerShares Insured National Muni Bond (PZA)

Whatever you do, whether you decide to tweak your portfolio or just sit and wait, stick to your investment plan. Once investors are guided by their emotions is when the real trouble begins.

For disclosure, some of Tom Lydon's clients own shares of EWP.

On Tight Supply, Gold Is Forecast to Top Records, ETFs Could Follow

A London investment manager expects that tightness in the gold supply could send prices soaring to new records that could affect exchange traded funds (ETFs), particularly those that hold the precious metal.

Gold has taken a step back in the last several trading days, but appears to be making a climb once again. On Tuesday, it traded at $931.60. Today, it's at $949.10. Those prices are a bit off the record level of $1,030.80 that was reached on March 17, reports Sitaraman Shankar for Reuters.

Tight supply of the commodity is the main reason for any price spikes. A fund manager at BlackRock says that production is likely to keep declining, and there haven't been enough gold discoveries to replace what's being mined.

Further putting a damper on gold supplies is that much of the supply resides in South America, which has high political risk, and South Africa, which is experiencing disruptive power outages.

Gold ETFs are higher today:

• streetTRACKS Gold Shares (GLD)
• iShares COMEX Gold Trust (IAU)
• Market Vectors Gold Miners (GDX)

For full disclosure, some of Tom Lydon's clients own shares of GLD.

Latin America, Brazil ETFs Are Bucking the Trend

Most single-country exchanged traded funds (ETFs) are sitting below their 200-day moving averages. Many, particularly those in Asia, are in the double digits in their positions below their trend lines.

Two funds are above, and they're sticking out like a sore thumb: iShares MSCI Brazil (EWZ) and the iShares S&P Latin America (ILF), which are 2.8% and 2.3% above their trend lines, respectively.

How is it that when the rest of the world seems to be dogged by economic woes, Latin America is still continuing to grow and perform relatively well? It turns out, lots of reasons.

1) UK integrators are gravitating toward the region, reports Doug Woodburn for vnunet, and they're setting up shop there.

2) Domestic demand is strong, fueling economic growth, say Carla Simoes and Romina Nicaretta for Bloomberg. Brazil is forecast to create more than 1.8 million government-registered job this year after posting a record last year of 1.62 million. The surge in these types of jobs, which provide full benefits, are considered a sign of Brazil's strengthening economy.

3) Brazil's fourth-quarter growth was 6.2%, surpassing expectations. It's the biggest year-over-year gain since June 2004.

4) Latin America is gearing up for some major infrastructure action, according to Public Works. The Latin American Leadership Forum will be held in early April and will feature the top 50 infrastructure projects that have a total value of $40 billion.

Emerging Market ETFs Could Be Worth a Look In Rough Times

Is it time for exchange traded fund (ETF) investors to take a trip to emerging markets - or anywhere other than the United States for now?

While some stocks are beginning to stir and the markets have been up so far today, thanks to optimism about the Federal Reserve's most recent rate cut, economists are still ready for a slowdown within the U.S. economy for the latter part of 2008.

The problems within the financial markets, in particular, are spreading into the broad stock market and are causing problems that will not go away overnight. One Moody's economist says the United States is 100% in a recession.

If that's the case, it could be time to seriously look elsewhere until this mess plays out.

Economists are favoring the long-term prospects of Brazil, China and India, reports Murray Coleman for Index Universe. China, in particular, has taken a real hit lately, but the prevailing sentiment is that it's not going to be this way forever. Mexico is showing signs that it's emerged from the U.S.' shadow. Russia's influence in Europe's emerging markets should also be watched.

If you're thinking emerging markets might be right for you, you've got many options once the funds move above their trend lines (200-day moving average):

• iShares MSCI Brazil Index (EWZ), down 4.6% year-to-date
• iShares MSCI Mexico Fund (EWW), down 3.1% year-to-date
• Market Vectors Russia (RSX), down 9.1% year-to-date

Even In These Markets, You Can Still Find ETF Movers and Shakers

Yesterday, the markets delivered outstanding performance and some exchange traded funds (ETFs) finished up in the double digits.

But one good day doesn't mean we're out of the slump yet. It's still time to take a defensive stance with your portfolio and make sure you've got that exit strategy firmly in place. But while it seems as though everything is in a downward spiral, but there are still some buying opportunities, believe it or not.

At our asset management firm, we track a list of about 100 ETFs and review it daily to see how things are performing and if there are any trends emerging. Of particular interest to us is which funds are above their 200-day moving averages. We never buy something sitting below that line.

Once we own an ETF, we keep an eye on it to make sure it's still above that line and continuing to perform. Once it dips below the trend line or falls 8% off its high, we sell. No ifs, ands or buts. A sell strategy from which emotions are entirely removed is the only kind that will benefit any investor.

It can be hard to let go of a little mover and shaker you've always had that soft spot for, but if you want to protect your money, you have to. It's like your parents always said when they were grounding you every other week: "This hurts me more than it hurts you." But sometimes it has to be done for everyone's good.

There are no guarantees that when you let a fund go, it's not going to turn around and deliver the numbers again. But that doesn't mean it won't, either. It's exactly why you have to remain as stoic as possible and stick to the plan and rationalize nothing.

There are a number of ETFs sitting well above their trend lines. Take a look at them, keep an eye on them and if they fit into your overall portfolio and are moving in an overall upward direction, they could be well worth considering:

• iShares MSCI Taiwan Index (EWT), 6.2% above
• Claymore/BNY BRIC (EEB), 5.9% above
• iShares S&P Latin America 40 Index (ILF), 10.1% above
• iShares MSCI Brazil Index (EWZ), 13.7% above
• Market Vectors Russia (RSX), 8.1% above
• iShares S&P GSSI Natural Resources (IGE), 6.8% above
• PowerShares DB Commodity Index Tracking Fund (DBC), 27.7% above
• iShares S&P GSCI Commodity-Indexed Trust (GSG), 23.9% above
• United States Oil Fund (USO), 28.3% above
• iShares Dow Jones US Oil & Gas Exploration Index (IEO), 14.4% above
• Energy Select Sector SPDR (XLE), 6.7% above
• iShares Dow Jones US Energy (IYE), 6% above
• Market Vectors Steel (SLX), 14.4% above
• iShares COMEX Gold Trust (IAU), 21.2% above
• streetTRACKS Gold Shares (GLD), 21.1% above
• Market Vectors Gold Miners (GDX), 16.5% above
• iShares Silver Trust (SLV), 30.3% above
• SPDR S&P Metals & Mining (XME), 11.5% above
• PowerShares DB Base Metals (DBB), 8.5% above
• PowerShares DB Agriculture (DBA), 30.8% above
• Market Vectors Global Agribusiness (MOO), 11.4% above
• CurrencyShares Euro Trust (FXE), 6.9% above
• CurrencyShares Swiss Franc Trust (FXF), 10.2% above
• CurrencyShares Japanese Yen Trust (FXY), 8.5% above

For full disclosure, some of Tom Lydon's clients own shares of EWT, IEO, DBB and DBA.
Read the disclosure, as Tom Lydon is a board member of Rydex Funds.

North American Neighbors' ETFs Holding Their Own

How has the U.S. economic slowdown impacted North American neighbors and their related exchange traded funds (ETFs)?

America is an important market for Canada and Mexico, and the United States is a major consumer of their exports, accounting for 80%. However, the numbers are slowing along with the American economy, explains  Carl Delfeld for ETF Folio.

According to a recent article in the Financial Times, both Canada and Mexico are more likely to sustain economic woes stemming from the United States than they have in the past. Diversification is the reason, and both countries have a strong domestic demand now that their homeland has strong consumer spending.

• iShares MSCI Canada Index (EWC)

• iShares MSCI Mexico Index (EWW)

Brazil Is Tranquil Amid US Turmoil; ETF Stays Solid

Brazil remains confident and poised, convinced that a U.S. recession will not affect neither the thriving domestic markets nor its related exchange traded fund(ETF). President Luis Inacio Lula da Silva said they are well-prepared to weather a United States recession because of thriving markets domestically, diversified exports and the elimination of foreign debt.

Alan Clendenning for Associated Press reports that Latin America's largest economy is basking in a prolonged boom because of global demand for Brazilian ethanol, iron ore and agricultural products. Its gross domestic product (GDP) is expected to grow at least 5% per year through 2010, as big-ticket items such as homes and cars are readily consumed. Their domestic market is around 190 million consumers and growing.

People are buying more and exports are growing since Brazil does not depend on the United States and Europe alone anymore. Exporting is on a more global level and this leaves Brazil tranquil in the face of an American crisis.

For single-country exposure, check out the iShares MSCI Brazil Index (EWZ). It's up 4.5% year-to-date, and up 21.1% since Jan. 22.

For full disclosure, some of Tom Lydon's clients own shares of EWZ.

Have a Portfolio Oscar-Themed Party With Metals ETFs

Just when you think gold exchange traded funds (ETFs) have hit their peak, the upward momentum continues. Yesterday, gold finished at $946.30.

And let's just say, if you're an actor who has been appearing in a lot of money-losing duds since winning that Oscar (we won't name names, Cuba Gooding Jr. Oops!), now might be the perfect time to hock that little gold man for some extra cash.

Not only is he plated in 24-karat gold, but he's diversified in other metals, too. Under the shiny gold exterior, there's some copper and silver, too. As precious metals are soaring to new heights amidst growing demand, he's more valuable than ever.

For exposure to both silver and gold, there's the PowerShares DB Precious Metals (DBP), which is up 13.2% year-to-date. If you'd rather just stick to gold or silver specifically, have a look at some focused ETFs such as streetTRACKS Gold Shares (GLD), up 13.1% year-to-date, or iShares Silver Trust (SLV), up 20.4% year-to-date.

Right now, there's no copper-focused ETF. But you can get a little exposure through the PowerShares DB Base Metals (DBB), which holds one-third of copper, aluminum and zinc. Year-to-date, it's up 18.7%. Chile is a major exporter of the material, and the iShares MSCI Chile Index (ECH), is up 1.1% year-to-date.

When the winners exclaim "This thing is heavier than I thought!" tonight, now we'll know why.

Both Bellies and Agriculture ETFs Benefit From Whole Grains

Whole grains are good for you, and agriculture exchange traded funds (ETFs) could be, too.

The planting season is just around the corner. With that is the result of a study showing that people can lose weight by loading up on whole grains, reports Reuters Health. The grains are heart-healthy and help dieters shed excess belly fat. We Americans love finding new ways to battle the bulge, so perhaps a run on whole grain products such as brown rice, barley and oatmeal is around the corner.

The results of the study are perfect timing. The PowerShares DB Agriculture (DBA) is weighted in corn, wheat, soybeans and sugar. Michale Ferrari for Seeking Alpha reports that more wheat is being planted in response to the growth in demand for the product, which is edging out corn and soybeans.

Market Vectors Global Agribusiness ETF (MOO) will feel the effects of this push and pull between the various types of agriculture.

As for the agriculture situation around the world:

• In South America, heavy rains and cooler temperatures will benefit corn and bean crops. The rest of the month could remain dry in Argentina, which will hurt the soybean crop.
• In the EU, a cool, dry week shouldn't have a negative effect on dormant EU oilseeds.
• India's outlook is dry, and as the oilseed pods are being set, they could use more moisture.
• Thanks to heavy snow and freezing rain in China, wheat and oilseed crops are going to be lost in the northern and easter regions. Recent estimates place more than 4 million hectares of land in the "suffered significant damage" category.

When Will ETF Industry Cotton to Demand?

Agriculture is all the rage right now, but where is that cotton exchange traded fund (ETF)?

Demand for this soft commodity hasn't dropped. You're probably wearing some of it right now. In fact, rapidly growing middle classes from emerging countries such as China, India and Latin America are buying more jeans, t-shirts and hats, reports Money Morning.

Because of the popularity of agriculture, far