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This week, basic materials managed an impressive performance, but it was mainly a rebound from the previous week.

Winners

iPath Dow Jones-UBS Nickel ETN(JJN) +8.5%

iPath Dow Jones-UBS Copper ETN(JJC) +6.8%

iPath Dow Jones-UBS Industrial Metals ETN(JJM) +6.4%

PowerShares DB Base Metals Fund(DBB) +6.3%

In the previous week, fears of subpar demand in China, coupled with a rallying greenback and recovery concerns, sent both JJC and DBB lower for the week. On Friday of this week, shares also fell for the same reasons, but gains earlier in the week were strong enough to make these funds winners.

Until a longer trend develops, it is likely that the base metals will continue to have this type of volatile performance.

iShares S&P Latin America 40 Index Fund(ILF) +4.5%

iShares MSCI Brazil Index Fund(EWZ) +4.6%

While Greece’s debt issues continued to weigh on Europe this week, Latin America provided a comforting source of strength for investors looking for gains abroad.

Brazil’s market, as tracked by EWZ, was the biggest mover in the region despite a less than stellar earnings report from mining giant Vale. ILF, with nearly two-thirds of its portfolio dedicated to the nation, was brought along for the ride.

Heading into next week, Brazil’s markets will be closed Monday and Tuesday for Carnival. During this time it will be interesting to see if Mexico and Chile, which account for the remainder of ILF’s portfolio, can prolong the region’s gains.

Claymore/AlphaShares China Real Estate(TAO) +5.0%

iShares FTSE/Xinhua China 25(FXI) +3.7%

Claymore/AlphaShares China Small Cap(HAO) +3.1%

China tightened its monetary policy on Friday by raising the reserve ratio for banks, sending shares lower on the day. China ETFs gained for the week though, after rebounding from large losses in the previous week.

HAO has the best return of the above ETFs in 2010, but it has lagged on rebound days, which led it to underperform this week.

Losers

U.S. Natural Gas(UNG) -1.2%

iPath Dow Jones-UBS Natural Gas ETN(GAZ) -1.9%

U.S. 12-Month Natural Gas(UNL) -1.0%

The recent winter storms helped deliver a larger than expected drawdown in natural gas inventory last week. The Energy Information Administration’s inventory report was delayed one day this week, to Friday, due to another round of storms, and the weekly update on natural gas was cancelled entirely.

The drawdown had investors bidding up natural gas on Friday, but the losses from earlier in the week were too large to overcome.

iShares Cohen & Steers Realty Majors(ICF) -0.7%

iShares Dow Jones U.S. Real Estate(IYR) -0.8%

SPDR Dow Jones REIT(RWR) -0.7%

Vanguard REIT(VNQ) -0.2%

ProLogis(PLD), a holding in several REIT ETFs, declined after reporting fourth-quarter earnings this week. The 2010 outlook was below expectations, and occupancy at the firms’ properties was down in the fourth quarter.

Shares have lagged this year however, and rising interest rates may be playing a role. Corporate bond ETFs have sold off this year and fell again this week.

Market Vectors Solar(KWT) -3.3%

Claymore/MAC Global Solar(TAN) -2.7%

The solar sector continued to suffer from negative sentiment based on concerns about planned subsidy cuts to the industry in Germany that will go into effect in April and July. Overall skepticism in the eurozone about a rescue plan for indebted Greece also weighed on the European heavy ETF.

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