Dion Money Management Blog   Money Management for Retirees and Their Families

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

Market Vectors Gold Miners(GDX) 3.7%
The markets are closing this volatile week on an up note, but jittery investors still bid up gold. This has helped the precious metals miners. Market Vectors Junior Gold Miners ETF(GDXJ) and Global X Silver Miners ETF(SIL) are top winners today.

SPDR Gold Shares(GLD), iShares COMEX Gold Trust(IAU) and iShares Silver Trust(SLV) ended the week on a positive note as well.

United States Oil Fund(USO) 3.3%
Although it tumbled during the first part of the week, oil futures-linked USO managed to regain a good portion of its lost ground on Friday. Crude’s gains can be attributed to concerns regarding the weather and the start of the Atlantic hurricane season.

The fund’s jump is impressive considering the downward GDP revision presented by the U.S. Commerce Department today.

First Trust S&P REIT ETF(FRI) 2.6%
REITs have been shining on Friday compared to other sectors of the real estate industry. Aside from FRI, other REIT focused ETFs are also scoring gains. Included among them are SPDR Dow Jones REIT ETF(RWR), iShares Cohen & Seers Realty Majors Index Fund(ICF), and Vanguard REIT Index ETF(VNQ).

Market Vectors Indonesia ETF(IDX) 3.2%
Indonesia leads the pack among single-nation international focused ETFs today.

IDX’s strength can be attributed to its financial sector, which accounts for more than a quarter of the fund’s total portfolio. Indonesia’s banks soared on optimism over loan growth.

Losers

iShares Dow Jones U.S. Home Construction Index Fund(ITB) -0.7%
Homebuilders and other subsectors of the real estate industry have suffered staggering drops in recent weeks as the post homebuyer tax credit hangover sets in.

Earlier in the week investors learned that new home sales dipped 33% in the previous month. On Friday, ITB took an additional hit after top holding KB Home(KBH) posted a wider- than- expected loss for the fiscal second quarter.

iShares MSCI Germany Index Fund(EWG) -0.3%
Ongoing concerns regarding the status of the EU and the euro continues to weigh on ETFs designed to track the bloc’s constituents. While iShares MSCI Spain Index Fund(EWP) and iShares MSCI Italy Index Fund(EWI) have traditionally felt the brunt of the pain, on Friday it was iShares Germany taking the biggest hit.

Disclaimer

With the upcoming G20 summit in Toronto, investors may find it interesting to know that ETFs have advanced to the point that every member of the G20 economic group, except for Argentina and Saudi Arabia, is now represented by a fund.

Many G20 countries even have more than one ETF that provides exposure to their markets.

There are lots of funds covering the United States, but my favorite fund for right now is the iShares Dow Jones Select Dividend Index Fund(DVY).

DVY is a good play for the current volatile market since it accesses large companies that issue stable dividends.

The reason for all the recent volatility is the European Union, which counts as a separate member of the G20, with its own representative.

The iShares MSCI EMU Index(EZU) tracks an index of eurozone stocks.

Aggressive investors can also play the EU’s economy with a currency bet on the euro against the U.S. dollar by using CurrencyShares Euro Trust(FXE). Investors who want to make the opposite bet can use ProShares Ultra Short Euro(EUO).

In addition to the EU being represented as a bloc, there are also several member states of the EU that are represented individually in the G20.

Some European Union countries have such important economies on a global scale that their individual economic situations can matter almost as much as that of the whole bloc.

For instance, since decisions being made by the finance ministers in Europe and the United States are seen as important for coordinating a continuation of the global economic recovery, markets were recently impacted negatively by disagreements between Germany and the U.S. ahead of the summit.

Despite its economic prowess, Germany is represented in ETF form by only one fund, iShares MSCI Germany Index Fund(EWG).

Other European Union and G20 members that can be invested in with an individual country ETF are Italy, via iShares MSCI Italy Index Fund(EWI) and France, by way of iShares MSCI France Index Fund(EWQ).

Move outside the European Union towards the eastern end of the continent, and investors can best gain exposure to G20 members Russia and Turkey with MarketVectors Russia ETF(RSX) and iShares MSCI Turkey Investable Market Index Fund(TUR).

Off the western coast of continental Europe and also outside of the euro zone is the United Kingdom, and exposure to the island nation can be found with iShares MSCI United Kingdom Index Fund(EWU).

South of the European continent is Africa and its sole G20 member, South Africa, currently host of the World Cup. Investors can gain access to the country’s markets with iShares MSCI South Africa Index Fund(EZA).

The Middle East features one G20 country, Saudi Arabia. And although this country provides much of the oil that runs the world economy, as mentioned above, there is no ETF that provides direct exposure. PowerShares DB Oil(DBO) is one ETF that invests in oil futures, however.

Going further east into Asia brings us to India and Indonesia, which can be bet on by using India Earnings Fund(EPI) and Market Vectors Indonesia(IDX).

In the far eastern parts of Asia are the G20 economies of South Korea, Japan, and China. South Korea is represented by EWY, which appears to be regaining some footing after being set back over concerns about rising tensions with the country’s northern neighbor.

Investors can gain exposure to China and Japan though with several ETFs, but my favored two are Claymore/AlphaShares China Small Cap Index ETF(HAO) and iShares MSCI Japan Index Fund(EWJ). Investors can also play the currency of these two nations with the WisdomTree Dreyfus Chinese Yuan(CYB) and CurrencyShares Japanese Yen(FXY).

HAO is the best way to bet on the success of China’s economy in the long term since it does not feature many big finance companies that could get hurt rapidly rising property prices cool off in the country. It’s a better bet than the much more popular iShares FTSE/Xinhua China 25(FXI).

Tucked away beneath the southeastern edge of Asia is the continent of Oceania and its sole resident, Australia, is represented by iShares MSCI Australia Index Fund(EWA).

Returning once again to the Americas finds four more G20 member states other than the U.S. — Canada, Argentina, Mexico, and Brazil. Although far from Asia, the economies of the Americas have connections to those just mentioned in Asia.

The Brazil-China connection is particularly strong, and investors should keep this in mind when they consider an investment such as Brazil Small-Cap ETF(BRF), my favorite fund with a focus on the country. A fund more directly impacted is iShares MSCI Brazil(EWZ), with hefty positions in materials and energy firms that export to Asia.

Investors can play Canada and Mexico with iShares Canada(EWC) and iShares Mexico(EWW).

Investors can use some or all of the above ETFs to make investments in various G20 countries. Investors can also place a bet against any progress at the G20 summit with gold. SPDR Gold Shares(GLD), iShares Comex Gold(IAU) or ETFS Gold Shares(SGOL) have been performing well due to investor concern about sovereign debt and government bailouts.

Disclaimer

Warren Buffett managed to make headlines this week with his plans to enter the Indian insurance industry as well as his interesting wager on the outcome of the 2010 FIFA World Cup.

Throughout these historically tumultuous times, Warren Buffett has maintained an optimistic outlook towards the U.S.’s future as an economic superpower.

In a 2008 New York Times op-ed piece famously titled, “Buy American. I Am,” the investor said overwhelming fear in the markets had driven down stock prices, making U.S. equities attractive.

In recent years, he has followed up this bullish rhetoric with action, saving Goldman Sachs(GS) from the brink of collapse, betting on the recovery of General Electric(GE), and making an all-in bet on the future of the U.S. economy by buying up the remaining shares of Burlington Northern Santa Fe Railroad.

Other members of the global economy, however, have not gone unnoticed. The Oracle of Omaha currently holds positions in a number of international companies including South Korean steelmaker Posco(PKX) and British supermarket retailer Tesco.

One of Buffett’s most popular non-U.S. investments is his stake in the Chinese battery maker-turned-electric car company, BYD. Since first buying 10% of the company’s shares in fall 2008 the company has taken off, earning the investor a particularly impressive return.

This week, the Economic Times uncovered Buffett’s plans to expand his international reach even further with a new venture into India’s markets. At the start of the week, the magazine reported that Berkshire Hathaway(BRK.A) had taken an interest in the emerging nation, and is planning to set up a subsidiary designed to sell auto insurance policies. In the U.S., Berkshire sells auto insurance through its Geico branch.

For now, Buffett appears reserved in his approach to enter the Indian markets. However, it will be interesting to see if this new venture leads to bigger moves in the future.

Other Bets in Sports

Since the start of June, people around the world have their eyes fixated on the 2010 FIFA World Cup in South Africa in hopes of seeing their home nation’s team take home the gold. Ajit Jain, the head of one of Berkshire Hathaway’s insurance units, has watched the tournament for other reasons.

Months prior to the tournament, the unit under Jain’s watch sold an insurance contract to a client which stated that, if France came out of the competition on top, Buffett’s firm would be required to pay out $30 million.

On Tuesday, Berkshire Hathaway learned that it has won its bet, thereby avoiding the multi-million dollar loss, thanks to Les Bleus’ poor performance on the pitch. The 1998 champions were officially knocked out of competition after losing to host nation South Africa.

Berkshire Hathaway is not a sports betting house. However, this was not the first time Buffett’s firm has sold a guarantee against an unusual event. In Bloomberg this week, readers were reminded of other interesting Berkshire deals, including one in which the firm insured against the cancellation of a college basketball tournament.

Buffett’s bet on the World Cup outcome indicates yet another instance where the investor has turned to derivatives as a way to make money. Although in the past Buffett has labeled these instruments as “financial weapons of mass destruction” in recent months, he has fallen under a considerably amount of scrutiny for Berkshire Hathaway’s nearly $70 billion derivative portfolio.

Disclaimer

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)  +5.4%
The markets are following up Wednesday’s shaky trading with another choppy session. As investors digest the week’s slew of economic information, it appears that fear is winning out over greed.

VXX has staged a comeback after retreating to test its 50-day moving average.

iPath Dow Jones-UBS Copper Total Return Subindex ETN(JJC) +2.2%
Despite Wednesday’s disappointing housing numbers, copper prices have managed to surge higher, leading JJC to welcomed gains.

Looking forward, investors interested in playing the red metal and other base metals should continue to keep an eye on the global economic recovery. China in particular will play a big part in keeping demand buoyed.

PowerShares DB Base Metals ETF(DBB), which dedicates a third of its portfolio to copper, is also a top winner today.

Losers

Claymore/MAC Global Solar Energy Index ETF(TAN) -3.9%
The solar industry continues to face pressure, with TAN taking one of the heaviest hits among the entire ETF industry today.

Currently, the debt laden Spanish government is sapping energy from the nation’s solar industry as it plans to retroactively cut solar tariffs.

TAN may have further to fall in the near future if Spain’s plans influence other cash-strapped nations to follow suit.

Vanguard REIT Index ETF(VNQ) -2.9%
REIT and consumer real estate ETFs continue to struggle on Wednesday after troubling reports showed that new home sales dipped 33% in the previous month.

Although VNQ enjoyed a nice rally at the start of June, the jump appears to have lost steam. The fund is currently trading back below its 50-day moving average.

iShares MSCI Spain Index Fund(EWP) -2.6%
Last week’s optimism appears to have worn off and Europe’s debt issues are once again weighing on ETFs designed to track the region’s most troubled constituents. Spain is leading euro-nation funds lower.

Throughout this week EWP has been testing its 200-day moving average. If the fund fails to breach this level, it could have further to fall.

Market Vectors Steel ETF(SLX) -2.6%
Although copper prices found strength, SLX, which tracks a basket of the world’s leading steel and iron ore producing companies, is facing pressure today.

Today’s dip can be attributed to concerns about China’s demand for the industrial metal. Recently, the fund has struggled to surpass 200-day moving. This indicator is on the verge of crossing its 50-day moving average: an bearish event labeled a “death cross” by technical analysts.

Disclaimer

This has been an interesting year so far, with two big market corrections in January and May.

I doubt the market will move up in a straight line for the rest of 2010, but there are some ETFs that ought to do well based on improving trends and fundamentals.

My first pick for the rest of 2010 is gold. I have held gold and gold miners at different times since 2004 and I’ve held iShares Comex Gold(IAU) continuously since January 2008.

I also hold IAU and Market Vectors Gold Miners(GDX) in my ETF Action Newsletter, and the allocation in gold is a big part of why this portfolio is beating the S&P 500 this year.

Gold has a very good long-term story that is just becoming popular. Long shunned by investors in the West, it is finally regaining status as an asset. It doesn’t seem to matter if the economy gets stronger or weaker. Whether it is sovereign debt creating investor fear about the value of currencies or whether it is growing demand from China and India, gold appears to find buyers.

Lately, the gold miners have been following the price of gold and that has meant gold miners have been an outperformer relative to the stock market. This isn’t always the case. In the past, gold miners have sometimes followed the stock market lower and that’s a big reason why GDX has yet to exceed its March 2008 all-time high, whereas SPDR Gold Shares(GLD) is up 20% since then.

After gold, the China story is getting more interesting and I continue to see good things from China. Whereas the U.S. and Europe are worried about deficits and slow growth, China is worried about inflation and housing bubbles, problems to be sure, but signs of growth. On top of that, the Chinese yuan will begin, once again, to fluctuate against the U.S. dollar.

Claymore/AlphaShares China Small Cap(HAO) was my pick as the best China ETF for 2010, and it’s still my choice. This fund has low exposure to financials, a sector that needs to raise a lot of capital, and higher exposure to consumer sectors.

One of the big news stories out of China, besides the change to the currency, has been strikes at several factories. Workers are demanding higher wages, and in many cases, receiving them. This is good news for the consumer sector and should help China balance its economic growth.

HAO has lagged over the past three months and it’s down 4% this year, offering a good entry point for investors.

My third pick for the second half of the year is natural gas. The BP oil spill has led Congress and the White House to take another look at energy reform, a popular idea that never amounts to anything.

Natural gas has a lot of factors working in its favor. It’s cheap, which is always good. The U.S. has massive supplies of it, which means Americans will be put to work to produce it and the money will stay in the U.S. Natural gas also emits less carbon than oil and coal, so it’s a bit cleaner if the government is looking to reduce carbon. It’s also efficient relative to other “greener” technologies. As one famous Spanish study showed, the creation of one green job in alternative energy actually caused the loss of 2.2 other jobs.

All those factors are one big reason why natural gas is called a bridge fuel, one that can fill America’s growing need for energy until alternatives become competitive. Whether Washington includes it as part of a reform package is another question.

Even without some help from the politicians, natural gas may do well after prices appear to have bottomed. The fuel tumbled along with almost every other commodity in 2008 and early 2009, but unlike crude oil, which rallied about 100% from its lows, natural gas kept on falling until September 2009, when it rallied to finish the year where it started.

Natural gas then proceeded to fall again in 2010, but it moved sideways in April and May, before rallying this month. Prices may not take off from here, but it’s a good sign for the industry.

I don’t like U.S. Natural Gas(UNG) as a play here. Although natural gas bounced from September 2009 to the end of the year, UNG kept falling during this period due to contango.

Instead, investors should go with First Trust ISE-Revere Natural Gas(FCG), which owns exploration and production firms — and they won’t be alone in buying these companies.

Private equity and sovereign wealth funds, many from Asia, have recently bought into producer Chesapeake(CHK). The company sold $1.7 billion of convertible preferred stock in May and another $900 million in preferred stock in June.

For income oriented investors, the J.P. Morgan Alerian MLP Index ETN(AMJ) offers some exposure to companies that profit from transporting and storing natural gas. The firms should do well if natural gas volumes increase. Since it’s an ETN, it carries with it credit risk, but the shares have performed well recently and still offer an attractive yield of about 5.8%.

At the time of publication, Dion Money Management owned IAU and GDX

Disclaimer

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

iShares Dow Jones U.S. Home Construction Index Fund(ITB) 2.8%
While today’s new home sales report was disappointing, the ETFs which track home construction and homebuilder firms are pulling off some of the strongest gains among the entire ETF industry. Aside from ITB, the SPDR S&P Homebuilder ETF(XHB) (XHB) is also jumping.

United States Natural Gas Fund(UNG) 0.4%
Natural gas prices are moving higher today, sending UNG and iPath Dow Jones-UBS Natural Gas Total Return Subindex ETN(GAZ) higher. At the start of June, UNG saw a nice rally, putting an end to its previous months of trading sideways. However, in recent weeks, the fund has shown signs that it may be settling once again.

iPath S&P 500 VIX Mid Term Futures ETN(VXZ) 0.2%
May data on new home sales came in today, pointing to a nearly 33% drop from the previous month. Year-over-year sales showed an 18% decline.

These disappointing numbers stoked fear in the hearts of investors and drove the volatility index higher, causing VXZ to bounce off its 50-day moving average. http://money.cnn.com/2010/06/23/real_estate/new_home_sales/

Losers

iShares MSCI Turkey Investable Market Index Fund(TUR) -2.2%
Turkey and Israel remain at odds over the Israeli raid on a Gaza flotilla at the end of May. On Wednesday, the political tensions helped pressure TUR and the iShares MSCI Israel Investable Market Index Fund(EIS). Looking ahead, as long as this conflict continues, these two funds should remain volatile.

ETFS Physical Palladium Shares(PALL) -2.1%
In today’s choppy trading session, precious metals are heading lower, with the most volatile of the industrial precious metals taking the biggest hit. This week, PALL has struggled to rise above its 50-day moving average. Investors may want to keep an eye on this level in the near future.

Gold, as tracked using iShares COMEX Gold Trust(IAU), is down only 0.6%.

iShares MSCI Australia Index Fund(EWA) -1.5%
Today’s poor housing numbers are putting pressure on outlooks for the U.S. and global market recovery. This is causing commodity-heavy single nation ETFs such as EWA and iShares MSCI Canada Index Fund(EWC) to take losses.

United States Oil Fund(USO) is another commodity loser today, dropping 1.5% on higher inventories.

Disclaimer

As the price of gold continues to creep higher after stalling out in mid-May, investors may also wonder if they can find a more dynamic investment in silver.

As with gold, investors interested in silver have several options, including the option to invest in a physically backed ETF or an ETF that provides exposure to the price of the metal through the mining companies.

The traditional physically backed ETFs are iShares Silver Trust Fund(SLV) and ETFS Physical Silver Shares ETF(SIVR), while the option for silver miner exposure is the Global X Silver Miners ETF(SIL).

Like gold miners, silver miners are expected to be more volatile of an investment than the metal itself, and SIL’s dynamism has already been displayed, having risen the past month by about 12% compared to an increase of about 5% for SLV.

The fund, which debuted in mid-April, has gathered a large amount of investor attention, and those considering the fund would not have to worry about liquidity concerns.

With many ETFs, there are a large number of holdings and net assets are distributed among them to the extent that no single company’s performance alone can influence the performance of the fund, even on a long term horizon.

In the case of SIL. though, the top holdings account for a large portion of total net assets. Investors should spend some time learning a bit more about these companies, since their performance will be capable of impacting the ETF over the mid to long term.

The top holding of SIL is Fresnillo PLC, which accounts for 13.9% of net assets. The company has extensive operations in Mexico that make them the largest primary producer of silver in the world. Additionally, investors should consider that the company is also a large producer of gold.

Shares of the company are primarily traded in London, so although operations take place in Mexico, the share value as reflected in the ETF will be affected by changes in the exchange rate between the U.S. dollar and British pound, not the U.S. dollar and the Mexican peso.

The second largest holding in SIL is Silver Wheaton(SLW), which accounts for 13.6% of net assets. SLW is listed in the U.S. but has its headquarters in Canada. It operates in many different corners of the globe, with metal purchasing agreements and affiliates across Europe and the Americas.

After SLW, the company taking up the most room in SIL is Pan American Silver (PAAS), which accounts for 12.2% of the fund. Unlike the previous two companies, PAAS focuses solely on silver as opposed to also dabbling in gold. It operates eight mines in South America, with more in development.

The last of the big four in SIL is Industrias Penoles CP, which accounts for 10.8% of the ETF’s net assets. The company is a large producer of silver from mines in Mexico, but it also has significant gold, lead, and zinc interests in the country.

Since silver prices tend to be more volatile than gold prices, the silver miners can also be expected to be more volatile than gold miners such as Market Vectors Gold Miners ETF(GDX) and Market Vectors Junior Gold Miners ETF(GDXJ). Additionally, with 50% of assets in the top four holdings, this ETF is more susceptible to company specific risk.

SIL should not be considered a safe-haven investment like gold or silver. Instead it is more of an aggressive play for investors that want to catch a rally in silver prices.

Disclaimer

China’s surprise appreciation of the yuan sent markets into a frenzy on Monday, but the return to greater flexibility in the exchange rate is a long-term policy shift that will have investment implications for months and possibly years to come.

On the positive side, the rising yuan will lift the value and earnings of Chinese companies, especially domestically focused companies that don’t need to worry about export competitiveness. Claymore/AlphaShares China Small Cap(HAO) remains the best choice with its heavier focus on domestic business, but the iShares FTSE/Xinhua China 25(FXI) will perform well in a general China rally.

For somewhat conservative investors looking for a currency play, WisdomTree Dreyfus Chinese Yuan(CYB) could provide stable returns. The yuan is not a volatile currency and if appreciation continues, this can deliver small steady gains. It’s also a defensive position, since in the event of a market correction, losses are likely to be small. I own the fund in my ETF Action Newsletter for these reasons.

Looking beyond China, larger gains are likely to be had in Asian emerging markets and some commodity areas, if history is any guide.

The initial report of the yuan revaluation sent the Korean won up more than 2% versus the U.S. dollar, the leader among a host of Asian currencies that advanced far more versus the greenback than the yuan. The export dependent nations of Korea, Malaysia, Indonesia, Vietnam, Thailand, Singapore and Taiwan generally tend to hold the value of their currency in line with the U.S. dollar to keep their exports attractive compared with China. With the yuan rising, these countries can allow their currencies to appreciate as well.

They are also likely to see greater demand from China for their goods and services, and in the case of Taiwan, an increase in tourism. On the same day as the currency announcement, both countries announced a joint slashing of cross straits airfare by 10 to 15%. China will also increase the number of flights to Taiwan by more than 10%.

Another thing these nations have going for them is low debt. Sovereign debt is a major concern for the developed world, but a number of Asian countries have already been through a sovereign debt crisis, the Asian Crisis of the late 1990s. Governments in the region have cleaned up their balance sheets and implemented financial reforms that continue to provide strong support for economic growth.

There also tends to be positive news coming from the region, such as the increased flights between Taiwan and China, while Indonesia eased restrictions on foreign investment earlier this month.

The ETFs for these countries are: iShares MSCI South Korea(EWY); iShares MSCI Singapore(EWS); iShares MSCI Malaysia(EWM); iShares MSCI Thailand(THD); iShares MSCI Taiwan(EWT); Market Vectors Indonesia(IDX) and Market Vectors Vietnam(VNM).

Year to date, THD, IDX and EWM are the better performing funds in this group of countries.

Investors who don’t want to research the strengths and weaknesses of these ETFs can one-stop shop with iShares MSCI All Country Asia ex Japan Index(AAXJ). It has 27% of assets in China, 18% in South Korea, 14% in Taiwan, 11% in India and 11% in Hong Kong.

Another sector seeing a gain on Monday was industrial commodities and raw materials such as copper, coal and steel. Market Vectors Coal (KOL) and Market Vectors Steel(SLX) are actually well positioned if the underlying commodities do well. SLX has 43% of assets in North America, where domestic supplies of raw materials provide stability for the industry. While the industry is not fully insulated from currency effects on commodity prices, a rising yuan will make U.S. steel more competitive.

KOL has hefty China exposure at 22% of assets, but it also has 47% in the United States. Indonesia and Australia, two coal exporters to China, make up 12% and 9% of the fund, respectively. A potential catalyst for coal assets could be the acquisition of mining properties by China’s sovereign wealth fund.

Yet another route is to invest in the commodities via futures backed ETFs. PowerShares DB Base Metals(DBB) is a popular ETF with a portfolio split three-ways in copper, aluminum and zinc. Several brokerages highlighted aluminum as a possible winner, and investors can gain exposure with the iPath DJ-UBS Aluminum ETN(JJU). However, the fund is lightly traded and ETNs carry credit risk, so DBB is a much better choice.

There’s also the SPDR S&P Metals and Mining ETF(XME), for investors who want to pick one fund with exposure to resource producers. Sector exposure amounts to 35% in steel, 24% in coal and consumable fuels, and 4% in aluminum.

Finally, if commodities should do well, then gold is unlikely to be left out of the equation. While the central bank has said it would not chase gold prices, retail investors have stepped up their buying. In the first quarter of 2010, the World Gold Council reports that Chinese jewelry demand (measured in tonnes) increased 8% from the first quarter of 2009 to 2010, while retail investment climbed 36%. China was the second largest gold buyer behind India.

By itself, a rising yuan wouldn’t have a great effect on gold, but since it is already performing well and attracting a lot of investors, additional buying will have a larger impact. SPDR Gold Shares(GLD), iShares Comex Gold(IAU) and ETFS Gold Shares(SGOL) are all solid choices.

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

Global X Silver Miners ETF(SIL) 0.8%
Precious metals are scoring gains today, with silver miners leading the pack. Market Vectors Junior Gold Miners(GDXJ) is underperforming its large-cap cousin, Market Vectors Gold Miners ETF(GDX).

Platinum and palladium, which tend to move in correlation to the rest of the market, are struggling today. ETFS Physical Palladium Shares(PALL) is taking a hit, while ETFS Physical Platinum Shares(PPLT) is relatively unchanged on the day.

iPath S&P 500 VIX Short-Term Futures ETN(VXX) 1.1%
After the market failed to hold onto gains brought on by Monday’s yuan revaluation, the markets are considerably choppy. With investors seeking out the safety of silver and gold in an effort to avoid risk, fear is regaining a presence.

VXX is now trading at its 50-day moving average. It will be interesting to see if the fund can hold onto these levels.

Losers

United States Natural Gas Fund(UNG) -2.3%
Natural gas prices are tumbling, pushing UNG and First Trust ISE-Revere Natural Gas Index ETF(FCG) lower. Today’s dip can be attributed to investors booking profits after prices rallies in response to ideal weather conditions. Typically, when the temperature rises, natural gas stockpiles are drawn upon, driving prices higher.

Heading into the summer, investors should keep a close eye on the forecast as it will likely be a strong determinant of UNG’s direction.

iShares Dow Jones U.S. Transportation Average Index Fund (IYT) -2.6%
The broad transportation industry is dipping today as IYT continues to struggle to get above its 50-day moving average. Today, shippers are hurting in light of the Baltic Dry Index’s recent dismal performance and airlines are facing negative press after the FAA advised American Airlines(AMR) to inspect its fleet of 767s after cracks were discovered.

First Trust S&P REIT ETF(FRI) -2.1%
Thanks to a mixed housing numbers report, REIT ETFs are following through Monday’s dips with another day of declines. FRI saw a strong rally at the start of June with the rest of the market. However thanks to a couple of dismal reports over the past two weeks, the fund’s trajectory has reversed, driving the fund back below its 50-day moving average.

Oil Services HOLDRs(OIH) -1.6%
Natural gas is not the only subsector of the energy industry to feel pressure today. Oil producers are also falling as BP’s oil spill continues to wreak havoc on the industry’s image.

Although OIH is taking the brunt of the heat today, SPDR S&P Oil & Gas Exploration & Production ETF(XOP), iShares Dow Jones U.S. Oil & Gas Exploration & Production Index Fund(IEO) and iShares Dow Jones U.S. Oil Equipment & Services Index Fund(IEZ) are tumbling as well.

Disclaimer

The ETF universe continues to expand and with over 1,000 different products currently trading, finding new, unique and attractive investment niches to fill has become a difficult task for providers.

As evidence, a number of ETF companies have resorted to launching funds which repackage indexes, while others have attempted to pull in new assets through the use of attractive pricing gimmicks.

However, some companies still have stuck to the traditional method of driving traffic: launching funds which fill gaps previously left untouched by other ETF providers. With products such as the Global X/InterBolsa FTSE Columbia 20 Index ETF(GXG), Global X Silver Miners ETF(SIL) and Global X China Financials ETF(CHIX), Global X, has relied on its unique collection of products to grow its brand. Oftentimes, Global X funds are first movers within their respective market niches.

Since its products tap into previous unexplored market niches, Global X’s suite of products includes a number of highly popular products as well as others that have struggled to gain traction. For instance, although it is just slightly over two months old, SIL has managed to take off with the growing interest in precious metals.

Today, the fund changes hands nearly 250,000 per day. Global X FTSE Nordic 30 ETF(GXF), on the other hand, has been around for nearly a year but has not been nearly as popular, with an average volume failing to break the 10,000-share mark.

On Tuesday, the firm will attempt to attract new investor assets with the launch of the Global X Brazil Mid Cap ETF(BRAZ). Although a number of products currently track aspects of this attractive emerging market, this fund provides investors with the very first opportunity to play Brazilian companies that have market caps ranging from $2 billion to $10 billion.

BRAZ will track the Solactive Brazil Mid Cap Index which consists of 40 individual holdings. Top positions include CPFL Energia, Companhia Energetica de Minas Gerais, All America Latina Logistica, and Metalurgica Gerdau.

Because it focuses on solely mid-cap companies, BRAZ will fill the gap left open between the large and mega cap-focused iShares MSCI Brazil Index Fund(EWZ) and the small-cap Market Vectors Brazil Small Cap ETF(BRF).

The new fund will carry a 0.69% expense ratio, causing it to fall between EWZ and BRF in terms of cost to investor.

In an interview with Bloomberg, a Global X spokeman said BRAZ’s index will expose investors to “local, well-established, less-risky companies.”

Looking at the fund’s sector breakdown, BRAZ appears well suited to live up to this promise. With consumer staples firms representing 17% of the fund’s portfolio BRAZ, like BRF, will be heavily influenced by the performance of the local Brazilian economy. At the same time, the fund’s large utilities exposure adds some stability.

Although the firm’s expectations of the fund appear optimistic, I would advise investors to avoid jumping right into BRAZ or any brand new ETF right off the start. As evidenced by its previous fund launches, Global X’s ETF products can either take off quickly or stumble out of the gate. Therefore, the best approach to playing BRAZ is to watch the fund’s performance for a few weeks to see if it can gain a following.

Disclaimer