The first sector that has performed remarkably well is the basic materials sector.  This sector includes industries such as chemicals, construction materials, containers and packaging, metals and mining, and paper along with forest products, states Ron DeLegge for ETF Guide.  This sector has gained ground thanks to some part in the rally of the commodities market.  The sector’s performance can be reflected through the performance of the Materials Select SPDR (XLB), which is up 23.5% year-to-date and above its 200-day moving average.

The next sector that has flourished is technology.  This sector is fairly diverse and includes Internet companies, semiconductor companies, software developers, wireless products and IT consulting services.  Some believe that this sector has posted its gains because of its ability to remain innovative, continue to keep consumers on their toes and overall financial strength.  The Technology Select SPDR (XLK) is up 19.7% year-to-date and above its 200-day moving average.

To the surprise of some, the last sector that has gained ground is consumer discretionary.  This sector is heavily dependent on consumer spending and includes apparel, consumer durables, automotive, restaurants, leisure, media and retailers.  Some suggest that this sector has rallied because consumers are optimistic of overall economic conditions. One caution: could rising energy prices once again put a damper on growth here?  The Consumer Discretionary Select SPDR (XLY) has gained nearly 11.9% year-to-date and above its 200-day moving average.

So how does one grab exposure to the aforementioned sectors, the best way is by utilizing the above mentioned ETFs.  The basic characteristics of ETFs will enable one to grab exposure to the industries while remaining diversified and keeping costs low.  This is one reason that the ETF industry saw an increase of inflows of $53 billion for the month of May.

Regardless of how well these ETFs have performed, all investors should always utilize a strategyand know exactly what you ETF holds.  After all, we can’t predict the future with certainty.

For more stories on these sectors, visit our technology, retail and consumer and materials categories.

Kevin Grewal contributed to this article.

• Consumerist Interviews Goolsbee About Credit Card Reform, Part 1 of 4, Consumerist
• Thriving Norway Provides an Economics Lesson, The New York Times
• The Planet Money Podcast, NPR. Planet Money provides the most sensible, easy-to-understand and entertaining breakdown of what’s happening in our economy, three times a week.
• Ugggh! I  Like the Materials and Energy ETFs That ‘They’ Like, ETF Expert
• 6 Small Things You Can Do When You Lack Discipline, Zenhabits

Manufacturing, and the exchange traded funds (ETFs) that track this economic indicator fell in February for the sixth time in seven months indicating that the overall U.S. economy is still hurting. What gives?

• One reason that the industrial production numbers continue to decline is the massive cutbacks that have hit the auto industry.
• Another reason is the collapse in U.S. exports.
  
• To top it all off, the financial crisis has choked off credit to consumers and businesses worldwide, leading to a slump in sales of cars, houses, airplanes and computers, states Bob Willis of Bloomberg.

Of all industries, the auto industry is the epicenter of the U.S. manufacturing slump. According to Autodata Corp., auto sales slipped 41% in Feburary to its lowest rate since December 1981. To add to this decline, General Motors (GM) announced that it will close an additional five plants by 2012 and is seeking an additional $16.6 billion in federal loans to help during its restructuring process. This weakness has even hit the paint industry: PPG industries (PPG) states that they will cut around 2,500 jobs as a result of weak demand from the automakers.

In regard to exports, the Commerce Department stated that the slump was caused by a decline in sales of autos, semiconductors, telecommunications gear and drilling equipment. The industries hit the hardest are the ones that make capital goods and construction-related equipment and materials.

One ETF that could feel the wrath of these numbers is the iShares Dow Jones U.S. Industrial (IYJ), which is down 20.3% year to date. But it’s up more than 4% in midday trading today on market relief over the Fed’s plan to inject another $1 trillion into the economy.

For investors bearish on the manufacturing sector, there’s the UltraShort Industrials PowerShares (SIJ), which is up 38.9% year to date.

Kevin Grewal contributed to this article.

The index went into turmoil after Prime Minister Vladimir Putin said OAO Mechel, a metals and mining company, would be investigated for overcharging for raw materials. The 50-stock index fell 21% off its May 19 high, reports William Mauldin for Bloomberg.

One strategist in Russia has gone so far as to say that Russia’s reputation as a safe haven for investors this year is finished in the wake of the allegations and falling oil prices.

Russia is also having a shareholder fight with TNK-BP, BP’s joint venture in Russia. Chief Executive Officer Robert Dudley left the country, citing harassment. His Russian visa was set to expire on July 29, and the renewal was in doubt. The question is, how much control is he going to have trying to run the company from outside the country? BP is worried that shareholders will gain day-to-day control of the company, reports Stanley Reed for BusinessWeek.

Steelmaker and coal producer stocks fell after Putin’s comments.

Market Vectors Russia (RSX) is trading down sharply this morning. Russia had enjoyed a nice ride earlier this year, thanks in large part to oil prices. The ETF was one of the top-performing funds for the month of May.

Earlier this year, we noted Russia’s strong potential could lift it into heavy-player territory. Will it rise above this bump in the road?

Year-to-date, it’s down 10.2%.

It’s been a challenge in the markets and exchange traded fund (ETF) realm lately, to put it mildly.

Things have picked up some in recent days, but as today illustrates: we’re not out of the woods yet. Have you got some kind of plan?

Glen Rogers for seeking Alpha gives us five of his ideas, and we add in some of our own thoughts, too:

• Raise cash: Reduce or sell some of your biggest gainers and losing stocks that are not going to rebound any time soon. Get out of any positions that have declined 8% or more off their highs or dropped below their 200-day moving averages.
• Hedge your energy position: Reduce positions in energy-related stocks and think about a short oil or gas ETF, such as ProShares Ultra Short Oil & Gas (DUG). Many fuel-related ETFs have declined in the last week and month, some significantly off their recent highs.
• Hedge your basic materials position: While this may not be a strategy for every investor, there are plenty of opportunities with ProShares or Rydex. Just be aware of the risks before you get in.
• Start rotating into health care/start buying financials: This sector may be ready to turn around as it has been badly beaten. And every body needs health care, even in an economic downturn. As with any kind of investment, though, we don’t recommend buying before they’ve crossed their trend lines. Financials in particular may have had a good run recently, but they’ve still got a ways to go.

This brings the Spider line to include 80 ETFs, with 31 of those focused on global access to international markets. The new offerings enter a market space that WisdomTree had been cornering.

Why would you choose one or the other? As Gary Gordon for ETF Expert says: it’s a matter of preference. State Street’s funds have a traditional market-cap weighted methodology. WisdomTree’s funds have a dividend-weighted index methodology. Dividends in the WisdomTree funds will come annually, while State Street’s will be quarterly.

The expense ratio for the State Street funds is set at 0.5%, while the WisdomTree funds come in at 0.58%.

The 10 new ETFs are are international sector SPDRs and they give access to investments outside the U.S. benchmarked to a series of S&P World ex-US Broad Market Indices. The following ETFs are market-cap weighted, include only non-U.S. holdings, and use the Global Industry Classification Standard, or GICS.

The ETFs are:

• SPDR S&P International Consumer Discretionary Sector (IPD)
• SPDR S&P International Consumer Staples (IPS)
• SPDR S&P International Financial Sector (IPF)
• SPDR S&P International Health Care Sector (IRY)
• SPDR S&P International Industrial Sector (IPN)
• SPDR S&P International Materials Sector (IRV)
• SPDR S&P International Technology Sector (IPK)
• SPDR S&P International Telecommunications Sector (IST)
• SPDR S&P International Utilities Sector (IPU)
• SPDR S&P International Energy Sector (IPW)

WisdomTree’s funds launched Oct. 13, 2006 and they are:

• WisdomTree International Basic Materials Sector (DBN)
• WisdomTree International Communications Sector (DGG)
• WisdomTree International Consumer Discretionary Sector (DPC)
• WisdomTree International Consumer Staples Sector (DPN)
• WisdomTree International Energy Sector (DKA)
• WisdomTree International Financial Sector (DRF)
• WisdomTree International Health Care Sector (DBR)
• WisdomTree International Industrial Sector (DDI)
• WisdomTree International Technology Sector (DBT)
• WisdomTree International Utilities Sector (DBU)
  

Caterpillar’s (CAT) second-quarter profit jumped 34%, handily dusting expectations, reports Daniel Lovering for the Associated Press. Much of the company’s success in the most recent quarter is owed to areas outside the United States, where 60% of its sales were racked up.

The company said its growth is mostly because of development in emerging markets, as well as growth industries such as energy and mining. Supply is tight for the products, they said, but they’re doing their best to keep up with the pace.

Among the company’s components: machinery and engine sales are up 21%. Across the globe, in the Asia-Pacific region, machinery sales are up 50% and engine sales are up 57%. In Latin America, machinery is up 23% and engines sales grew 42%.

Among the ETFs that could dig up returns if Caterpillar continues to put up the numbers include:

• DIAMONDS Trust, Series 1 (DIA): down 10.5% year-to-date; Caterpillar is 4.6%
• Industrial Select Sector SPDR (XLI): down 12% year-to-date; Caterpillar is 3.5%
• iShares Dow Jones US Industrial (IYJ): down 10.5% year-to-date; Caterpillar is 2.5%

Holdings in the iShares COMEX Gold Trust (SLV) rose to a record 6,092.31 tons on July 16, a 0.5% rise from the previous day’s level, reports Jan Harvey for Reuters. The fund was launched on April 21, 2006.

Analysts say that demand for physical silver has dropped off along with demand in the photography industry (it’s used to develop photos the old-fashioned way), so the industry is looking at investment demand as support for its prices.

Aside from photography, it has uses in jewelry, industry and silverware. Those industries represent 95% of annual silver consumption. It’s prized for its strength, malleability and conductivity.

Silver closed on Friday at $18.54 an ounce.

SLV is up 24.8% year-to-date.

The London-based provider, which deals in exchange traded commodities (ETCs) started two years ago with $60 million in assets. After the first year, the number of assets had grown to $2.5 billion. Today, they’re at $10.5 billion and are Europe’s largest ETF provider.

When they started out, “We were four guys. Now we’re 30. It’s changed a lot,” says Director Hector McNeil.

In 2006, the provider created the world’s first all-ETC platform, which listed on the London Stock Exchange. Since then, the company has branched out to four other major exchanges in Europe: Italy, Paris, Frankfurt and Amsterdam.

Today, the company has a lineup of commodity funds covering everything from the broad market, livestock and agriculture to energy, precious metals and industrial metals. There are 129 ETCs in the lineup.

Driven by the skyrocketing price of platinum, among ETF Securities’ more popular funds is the ETFS Physical Platinum (PHPT.L). The firm also is behind several firsts, including the world’s first gold and oil ETCs. Precious metals, in fact, is one of the company’s most popular sectors, as 46% of assets are focused on them.

Agriculture is 32.3%, followed by energy at 12.1%.

ETF Securities isn’t just popular in Europe, however. McNeil told us that there is interest in the United States, too, as two-fifths of the inquiries the company receives comes from here. Unfortunately, because of Securities and Exchange Commission (SEC) regulations, there isn’t much he can do about it.

“We always have to turn them away and say, ‘I can’t answer your questions,’” McNeil says.

U.S.-based investors can buy funds on other exchanges through their brokers that have the capability to do so.

They’re not immediately looking at branching out into the United States, either. “We have aspirations in the far East and Middle East. That’s where a lot of the action’s going to be. The U.S. is quite saturated,” he says.

ETCs are transparent and open-ended securities that trade on an exchange. They allow investors to get commodities exposure without dealing futures or taking delivery. Their primary difference from ETFs are that while ETFs use a fund structure, ETCs use a secured, undated, zero-coupon note structure. ETNs are 30-year debt instruments, and a promise by the provider that they will pay the investor the amount reflecting a change in the underlying index. Like ETCs, they don’t hold the physical commodity.

ETF Securities’ ETCs range in cost from a 0.39% to 0.98% expense ratio.

It’s no secret that commodities are in the midst of a bull that, according to some experts, is likely to continue for some time. ETF Securities’ lineup has no doubt benefited from developments in recent years, including:

• A booming global economy and emerging markets becoming more correlated to developed ones
• A falling U.S. dollar, as gold is negatively correlated to it
• Precious metals in general are in short supply as supply is kept tight because of few producers
• Energy and fuel prices are at record highs, including those of gas, natural gas and oil
• A global food shortage, which has driven demand for agriculture
• A global building boom, which has led to increased calls for industrial metals such as steel, platinum and silver

While some sectors have become beaten-down in recent months (hello, financials and homebuilders), others have been poster children for success, reports Roger Nusbaum for The Street. Materials and energy have been two areas that have demonstrated strong potential down the line, thanks to domestic and global demand for various commodities such as steel, oil, natural gas and more.

Among the ways to access these areas include:

• Materials Sector SPDR (XLB) is down 2.9% year-to-date, but it’s outperforming the S&P 500 by 11.3%.

• iShares S&P Global Materials Sector Index (MXI) is down 1.8% year-to-date, but could benefit down the line from its global outlook. The United States is 20.3% of the fund

• iShares Dow Jones Basic Materials (IYM) is up 2.7% year-to-date.

Selecting sectors is one of the key strategies in trend following, because as the current situation shows, while there are areas trending down for the time being, other areas are moving up. It’s just a matter of spotting them, but trust us – they’re there!

When choosing a sector, or an ETF to represent it, it is wise for investors to be aware of the current trends in the market that will help move or hinder that sector. This way, investors can move with any changes that are occurring.

These funds are currently below their 200-day moving averages, so you will want to hold off on considering them until they turn around.