Dion’s Tuesday ETF Winners and Losers
Welcome to Don Dion’s Daily ETF Winners and Losers. Be sure to stop by each day to get a feel of who’s winning and who’s losing when it comes to ETFs.
Winners
iPath S&P 500 VIX Short-Term Futures ETN (VXX) 6.7%
Thanks to a dismal consumer confidence report and concerns regarding China’s economic growth prospects, fear is in abundance and the VIX is scoring gains. Over the past week and a half, VXX has staged an impressive bounce against its 50-day moving average but remains too dangerous to consider a long-term holding.
CurrencyShares Japanese Yen Trust (FXY) 1.0%
Rather than using VIX-based ETFs like VXX to play down days like these, I would advise investors to use funds like FXY, iShares Barclay’s 20+ Year Treasury Bond Fund(TLT) and iShares COMEX Gold Shares(IAU) as stable defensive plays.
Today, all three of these funds have managed to avoid falling into negative territory.
Losers
iShares MSCI Switzerland Index Fund (EWL) -6.0%
The strength of the Swiss franc does not have the National Bank of Switzerland worried as evidenced by their comments regarding the lack of deflationary risk issued on Monday. However, investors do not appear to share the same sentiment and EWL is suffering. EWL is actually down about 2% from yesterday’s late trading, ahead of the eurozone country ETFs, but a very large spike at the end of the trading day has led to the large reported loss today.
Investors can play the nation’s currency, which has recently surged against the euro and the U.S. dollar, using the CurrencyShares Swiss Franc Trust(FXF).
Market Vectors Coal ETF (KOL) -5.2%
Concerns about China’s growth prospects are putting pressure on commodities and materials funds, driving KOL, Market Vectors Steel ETF(SLX), SPDR Metals & Mining ETF(XME) and iPath Dow Jones-UBS Copper Total Return Subindex ETN(JJC) lower.
Investors interested in playing materials in the future should continue to keep a close watch on this Asian powerhouse. The nation’s demand for resources is a strong determinant of price direction.
iShares MSCI Italy Index Fund (EWI) -4.8%
Europe’s debt crisis has managed to steal back some headlines, causing investors to flee the most troubled of the currency bloc’s constituents. EWI and iShares MSCI Spain Index Fund(EWP) are funds that represent some of the most at-risk nations in Europe right now and should be avoided entirely.
First Trust ISE Chindia Index ETF (FNI) -4.8%
China’s markets took a heavy hit today on concerns about the nation’s economic growth prospects. FNI and PowerShares Golden Dragon Halter USX China Portfolio(PGJ) are among the China-focused ETFs taking the biggest hits. FNI is designed to provide investors with exposure to both the Chinese and Indian markets. Although geographically the fund’s index is diverse, it still maintains heavy exposure to China’s massive state run firms I have advised investors against in the past.
Continue to turn to Claymore/AlphaShares China Small Cap Index ETF(HAO) to fulfill your thirst for Chinese equities.
