Dion Money Management Blog   Money Management for Retirees and Their Families

Leading the ETF pack this week were the regional banks. Though these institutions have been able to benefit as Washington continues its assault on Wall Street giants, speculation also played a part in these firms’ rise over the past few days.

Winners

SPDR KBW Bank ETF (KBE) +3.8%

iShares Dow Jones U.S. Regional Banks Index Fund(IAT) +3.2%

SPDR KBW Regional Bank(KRE) +2.1%

The U.K. financial goliath Barclays stirred up the regional banking sector on Wednesday when a report indicated that the firm was looking to acquire U.S. retail banking assets.

KBE saw an additional rise when Vikram Pandit of Citigroup(C) provided investors with an optimistic outlook for the troubled company. Citigroup accounts for 8% of the fund’s index.

First Trust NYSE Arca Biotechnology Index Fund(FBT) +4.5%

SPDR S&P Biotechnology(XBI) +2.3%

PowerShares Dynamic Biotechnology and Genome Portfolio(PBE) +2%

For the second week in a row, the biotech industry was a big winner in the ETF arena. As with last time, the FBT managed to handily beat its SPDR and iShares competitors to lead this health care subsector higher.

Helping to power FBT over XBI this week was InterMune’s(ITMN) 60% jump on Wednesday. In the past month alone, ITMN has managed to gain more than 120%. This week, the company saw a rise from the optimism that the FDA would approve its experimental drug used to treat idiopathic pulmonary fibrosis, a disease that causes scarring of the lung.

After the advance, InterMune is now FBT’s top holding, accounting for more than 10% of the fund’s total portfolio.

Market Vectors Indonesia(IDX) +3%

Standard & Poor’s raised Indonesia’s foreign currency sovereign credit rating on Friday, and the nation’s central bank raised growth estimates for 2010 and 2011. The country will be visited by President Obama later this month, and then by Chinese Prime Minister Wen Jiabao in April.

Though the fund is up 9.2% this year, it is still has about 1.5% to go before it surpasses its Jan. 19 high of $68.82.
Losers

United States Natural Gas Fund(UNG) -4.6%

iPath Dow Jones-UBS Natural Gas Subindex Total Return ETN(GAZ) -4.4%

United States 12 Month Natural(UNL) -3.7%

UNG continues to set new records. The only problem for long investors is that those records are record lows. UNG broke $8 a share this week to close at $7.97. It was the first time the security traded below $8 intraday as well.

This week’s slide came as inventory numbers met expectations. The decline in prices continues to be a healthy sign of natural gas supply, and investors will have to wait for a pickup in demand before UNG can put in a bottom.

iPath Dow Jones-UBS Grains Subindex Total Return ETN(JJG) -2.4%

PowerShares DB Agriculture Fund(DBA) -1.6%

Soybean, wheat and corn futures stumbled this week in light of strong forecast yields from top-producing nations including the U.S. and South America. As supplies continue to outweigh demand, expect commodity-backed agriculture funds like DBA to continue their underperformance.

iPath Dow Jones-UBS Nickel ETN(JJN) -3.8%

Despite the continuation of a nearly seven-month mine strike in Subury, Ontario, nickel prices still faltered this week, and JJN led the losers.

Though this week’s performance was dismal, global nickel prices may soon see a rebound. According to a report from UBS, global demand for the metal appears to be stabilizing, and producers in the developed world are beginning to ramp up production.

With the outlook for both demand and supply improving, the days of nickel’s downfall may soon be numbered.

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