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

iShares MSCI France Index Fund (EWQ) 1.9%
The France ETF is a noticeable leader as we approach the close the week. Like other international funds from iShares, EWQ is designed to provide investors with exposure to the largest and most liquid companies based in France. The fund’s largest holdings include Total (TOT) , Sanofi-Aventis (SNY) and BNP Paribas.

Fellow European ETFs displaying strength include iShares MSCI Sweden Index Fund (EWD) , iShares MSCI Netherlands Investable Market Index Fund (EWN) , and iShares MSCI EMU Index Fund (EZU) .

JPMorgan Alerian MLP Index ETN (AMJ) 1.1%
Exchange traded products designed to target master limited partnerships are heading higher today despite weakness in natural gas prices. Companies represented in products such as AMJ and Morgan Stanley Cushing MLP High Income Index ETN (MLPY) are responsible for storing and transporting this fuel.

Aside from being unique options for natural gas hungry investors, MLPs offer attractive yields.

Market Vectors Rare Earth/Strategic Metals ETF (REMX) 0.9%
Shares of industry-leader Molycorp (MCP) are helping to lift REMX to leading gains. According to the fund’s website, MCP accounts for over 5.5% of its total portfolio, making it the sixth largest holding.

Thursday marks REMX’s third consecutive day of gains.

Losers

iPath Dow Jones UBS Sugar Subindex Total Return ETN (SGG) -4.1%

A number of soft commodities-linked ETNs are heading south, led by SGG and the iPath Dow Jones UBS Cotton Subindex Total Return ETN (BAL) . In both cases, Thursday’s decline has snapped a multi-day run-up.

Single-crop commodity funds such as SGG and BAL are wildly volatile options and therefore, investors looking for long-term plays on agriculture should steer clear.

Market Vectors Vietnam ETF (VNM) -2.6%
Vietnam’s marketplace is heading into the close of the week on a low note, leading VNM to suffer its fourth consecutive day of losses. This downturn has pushed the fund to new 2011 lows, revisiting levels last seen in September 2010.

Frontier nations like Vietnam are inherently volatile. Investors looking to try their luck here must be ready for bouts of tumultuous action.

iPath Dow Jones Natural Gas Subindex Total Return ETN (GAZ) -5.5%
Natural gas prices are heading lower, pressured by this morning’s Energy Information Administration storage report. According to the agency, stockpiles of the fuel grew more than expected during the past week.

GAZ’s 8% premium is playing a major role in pushing the fund to heavier declines than its fellow natural gas futures-backed product, United States Natural Gas Fund (UNG) .

Disclaimer

Precious metals have become a major region of interest for ETF fund sponsors. Since its introduction in late 2004, the physically based SPDR Gold Shares (GLD) has taken off in popularity, gathering over $60 billion in assets, making it the second largest ETF in the world.

Over the ensuing years, the success of this fund has been noticed by large and small providers. Many, attempting to profit from interest in this corner of the market, have launched their own funds designed to offer ways to gain access to these shiny resources.

While some firms, like Global X and Market Vectors, have opted to take the equity-based route with miner funds like the Global X Silver Miners ETF (SIL) and Market Vectors Gold Miners ETF (GDX) respectively, others have chosen to use futures contracts or physical stockpiles to provide investors with direct access to their desired metals.

Many of the physically based single commodity precious metal ETFs like GLD, iShares Silver Trust (SLV) and ETFS Physical Palladium Shares (PALL) have proven wildly popular amongst investors.

Sensing persistent rampant demand for these shiny metals, providers have continued to develop and evolve their product lines, offering new and unique ways to gain direct access to these commodities.

One particularly interesting development has been the introduction of precious metal basket funds. Today, using products offered by companies such as ETF Securities and PowerShares, investors can instantly tap into two or more precious metals at the same time.

These consolidated precious metals funds may prove popular for a variety of different scenarios. For instance, precious metal bulls who prefer a hands-off approach to investing may find the ETFS Physical Precious Metals Basket Shares (GLTR) to be ideally suited.

This fund is a one-stop-shop precious metal ETF, combining exposure to four resources: gold, silver, platinum, and palladium. According to the fund’s Website, each share exposes investors to approximately 0.3 ounces of gold; 1.1 ounces of silver; 0.004 ounces of platinum; and 0.006 ounces of palladium.

ETF Securities’ ETFS Physical White Metals Basket Shares (WITE) , meanwhile, may prove more attractive for those looking for an active approach to precious metal investing. Each share of WITE provides investors with exposure to a combination of silver, platinum and palladium. According to its sponsor, WITE’s per-share metal entitlement is approximately 1.0 ounce of silver; 0.01 ounce of platinum; and 0.08 ounce of palladium.

Due to the volatile nature of industrious metals like silver, palladium and platinum, WITE is best utilized as a short-term tactical play on market strength. By moving in and out of WITE while maintaining a long-term physical gold holding like GLD, investors can position themselves to benefit during market swings.

Despite its unique and eye-catching take on precious metals, however, WITE is a fund investors should approach with caution. Because the fund’s daily trading volume remains low, it could suffer from liquidity issues down the road.

The PowerShares DB Precious Metals Fund (DBP) is a futures-backed fund that splits exposure across gold and silver.

Currently gold dominates the largest percentage of the fund’s portfolio, accounting for three-quarters of its index. Although its reach across the precious metal spectrum is not as expansive as other options, by cutting out notably volatile players like platinum and palladium, the fund may appeal to conservative investors. Additionally, with an average daily trading volume of over 120,000, DPB is the most liquid of the precious metals basket funds.

The advent of precious metal ETFs has made gaining access to these attractive resources as simple as investing in traditional stocks and bonds. Although the recent commodities shakeup has caused many investors to turn away from gold, silver, platinum and palladium, when the clouds clear and these resources fall back into favor, GLTR, WITE, and DBP will be funds to keep on the radars.

Disclaimer

In recent weeks, a variety of factors have helped to muddy many investors’ market outlooks.

The ongoing commodities shakeup, concerns about the U.S. debt limit, and the ongoing political and economic turmoil facing regions including Europe, the Middle East and Northern Africa are among the issues that are currently reigniting fears and causing skittish investors to second guess the strength and longevity of the ongoing market recovery.

Given these looming concerns, the relief that comes with sticking to the sidelines may be attractive. However, heading for the exits is not the ideal option at this time. Though rocky, we remain on the road to recovery, and investors who choose to bail out now will risk missing out on any strength in store for when the skies clear down the road.

The ETF industry is laden with funds that are well-designed to ease the minds of jittery investors and prepare them for all types of investing environments. Amidst choppy markets, appropriate exposure to defensive assets such as gold and fixed income can help provide a welcomed dose of comfort and portfolio stability during times of uncertainty.

Dividend-paying equity ETFs such as iShares Dow Jones Select Dividend Index Fund (DVY) and SPDR S&P Dividend ETF (SDY) are two options investors may want to consider when looking for ways to both protect against turmoil and prepare for upward action ahead.

Both DVY and SDY provide investors with expansive coverage of the yield-bearing equity universe and provide investors with payouts of more than 3%. In examining the respective breakdowns of the two funds, however, a number of marked differences come to light.

DVY, the older of the two funds, aims to replicate the performance of the Dow Jones U.S. Select Dividend Index. According to the fund’s prospectus, this index is comprised of 100 companies in the Dow Jones U.S. Index that “have provided a relatively high dividend yields on a consistent basis over time.”

The S&P High Yield Dividend Aristocrats Index, which underlies SDY, meanwhile, seeks to combine the 50 highest yielding companies in the S&P Composite 1500 Index. In order to be considered as an index component, however, a company must have consistently raised its dividend over the past 25 years.

Due to the divergences between their respective indexing strategies, DVY and SDY boast noticeably different underlying holdings. For instance, DVY’s index is heavily geared towards utilities and consumer goods, which together account for over 50% of the fund’s index. SDY, on the other hand, leans more towards the consumer staples and financials industries, which represent slightly over one-third of the fund’s assets.

DVY’s top holdings include Lorillard (LO) , Chevron (CVX) and Entergy (ETR) . SDY is headlined by CenturyLink (CTL) , Pitney Brothers (PBI) and Leggett & Platt (LEG) .

While both products will prove effective in providing investors with adequate exposure to dividend-paying companies, DVY has been a consistent outperformer and my personal fund of choice. Aside from outpacing its competitor, year-to-date, DVY has also managed to surpass the broader S&P 500 by a comfortable margin.

This recent bout of economic turmoil may be disconcerting. However, rather than heading for the exits, conservative long term minded investors should view this recent market soft spot as a chance to gear up for future strength. By utilizing defensive asset classes and dividend-yielding equities, nervous investors will be able to protect against current headwinds and prepare for profits in the weeks and months ahead.

Disclaimer

At the start of this week, Joy Global (JOYG) stole the headlines with news that the coal mining equipment firm was planning to purchase LeTourneau Technologies from Rowan Companies (RDC) for $1.1 billion.

There are a number of ETFs that will be likely affected as more is learned about this deal.

The most direct way to gain access to the Joy Global deal is through the Market Vectors Coal ETF (KOL) , which is designed to track some of the world’s largest and most liquid coal-related companies. Currently, shares of JOYG represent 8% of its portfolio, making it the third largest position.

Other major KOL holdings include Bucyrus International (BUCY) , Consol Energy (CNX) and Peabody Energy (BTU) .

Although it is less obvious, the First Trust ISE Revere Natural Gas Index Fund (FCG) is another fund that may fall into focus in response to Joy Global’s LeTourneau acquisition.

Joy Global is the most recent example of a big name energy firm branching off from its bread and butter niche and venturing into the realm of natural gas. One of the more memorable was Exxon Mobil ’s (XOM) landmark decision in late 2009 to purchase XTO Energy. The deal, valued at approximately $40 billion, was viewed as a major vote of confidence for the natural gas industry and has raised speculation as to how big of a role natural gas will play in Big Oil’s future.

Fellow coal companies have taken steps to boost their exposure to natural gas as well. For example, in 2010, coal heavyweight Consol Energy completed the buyback of its natural gas spin- off CNX Gas. During the same year, the firm spent an additional $3.5 billion to acquire natural gas-related assets from Dominion Resources (D) .

The fact that big names from oil, coal and other corners of the energy market are willing to gain take steps into natural gas bodes well for the resource’s prospects as we look ahead.

At this time, FCG stands out as the strongest, and most liquid equity-based energy ETF dedicated specifically to companies with expansive exposure to natural gas. The fund’s index is headlined by companies including Cabot Oil & Gas (COG) , PetroHawk Energy (HK) , Southwestern Energy (SWN) and Stone Energy (SYG) .

On top of providing investors with general exposure to natural gas companies, FCG is an attractive play for investors looking to benefit as firms like Joy Global expand their presence in the natural gas industry. Reflecting their increased reliance on this fuel, FCG currently boasts notable exposure to oil majors including Exxon, Royal Dutch Shell (RDS.A) and ConocoPhillips (COP) .

Looking ahead, commodities appear set for volatility. Therefore, investors must use caution when jumping into KOL, FCG, or any other resource-related fund. These products are best utilized as small, niche components of a well-diversified 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 Dow Jones UBS Cotton Subindex Total Return ETN (BAL) 5.1%
Commodities are seeing mixed action at the start of this week. While agriculture-related funds such as the Teucrium Corn ETF (CORN) , BAL, and iPath Dow Jones UBS Sugar Subindex Total Return ETN (SGG) are heading higher, other resources are stuck in negative territory.

It is difficult to judge where these single commodity funds will head from day to day. Investors looking for a stronger, more reliable long term play should turn to diversified options like PowerShares DB Agriculture Fund (DBA) .

iShares MSCI Turkey Investable Market Index Fund (TUR) 1.6%
The Turkey ETF has struggled throughout this month as uncertainty persists across the Middle East and Northern Africa. During this period, the fund has moved downward, dipping below its 50- and 200-day moving average and revisiting levels seen prior to its April run-up.

iShares MSCI Sweden Index Fund (EWD) 1.9%
The Swedish marketplace is starting off the week on a positive note, leading EWD to gains. Sweden may prove to be an attractive option for investors looking for relatively stable European exposure. However, before jumping into this fund it is crucial to remember that nearly 20% of its portfolio is spread across two holdings: Ericsson (ERIC) and H&M.

Losers

United States Gasoline Fund (UGA) -4.0%
Gasoline prices are taking a steep hit at the start of this week, leading the futures-based UGA to industry leading losses.

Meanwhile, other energy related ETFs are behaving in a mixed fashion. The United States Oil Fund (USO) is following UGA lower while the United States Natural Gas Fund (UNG) is up nearly 2%.

First Trust Dow Jones Internet Index Fund (FDN) -2.0%
Internet players including Amazon (AMZN) , eBay (EBAY) , Salesforce.com (CRM) and Yahoo! (YHOO) are running into trouble and leading the internet ETF to notable losses.

Despite its downturn, I continue to view FDN in a positive light. The fund is a strong play for investors looking for a well-balanced way to tap into the technology industry.

iShares Silver Trust (SLV) -2.5%
Silver’s shaky action has continued as we start the second half of May as bullion-backed products like SLV and ETFS Physical Silver Shares (SIVR) tread lower.

Gold, meanwhile, is holding up. During early afternoon trading, shares of iShares Gold Trust (IAU) were unchanged.

Disclaimer

Here are five ETFs to watch this week.

iShares Silver Trust (SLV)
As I forecasted in last week’s “5 ETFs to Watch,” commodities have continued to behave in a volatile manner. The bullion-backed SLV’s performance was particularly bipolar. During the early part of the week, SLV managed to pull off gains but its strength was short-lived. By the Friday, it had retreated to the previous week’s lows.

Silver will continue to generate press in the week ahead as market watchers debate and discuss the longevity of the current commodities shake up, and look for ways to navigate it.

Although I continue to view precious metals as a promising long-term play, I urge investors to avoid being overly exposed to this asset class. By keeping exposure to materials like gold and silver small and concentrated, it is possible to benefit from their long-term defensive nature while protecting against short term volatility.

Market Vectors Agribusiness ETF (MOO)
Like SLV, agricultural-related ETFs will be in the spotlight as commentators and analysts investigate the ongoing volatility across the commodities spectrum. The equity-backed MOO will be of particular interest on Wednesday, when industry leader Deere (DE) reports its earnings. DE is listed as MOO’s second largest holding and accounts for over 8% of its total assets.

In past quarters, the farming equipment maker has been an impressive earnings performer, beating out analysts estimates. Looking to the week ahead, it will be interesting to see if it can follow through with another strong report.

iShares Dow Jones U.S. Home Construction Index Fund (ITB)
A variety of real estate-related data points are scheduled to be released this week, thrusting the residential housing market and homebuilders into the spotlight. On top of the housing starts and existing home sales data that are slated for Tuesday and Thursday respectively, Home Depot (HD) and Lowes (LOW) will report their earnings reports during the first half of the week.

ITB and the SPDR S&P Homebuilders ETF (XHB) will likely be exciting to watch in the coming days, though I continue to have reservations towards the real estate industry. The iShares Cohen & Steers Realty Majors Index Fund (ICF) remains my fund of choice for this region of the market.

SPDR S&P Retail ETF (XRT)
Discount retail goliath Wal-Mart (WMT) is slated to report its quarterly earnings performance on Tuesday. On top of providing investors with information on the state of the consumer, this report typically signifies the end of the earnings season.

Aside from Wal-Mart, investors should be closely following Target (TGT) , Limited Brands (LTD) , TJX Companies (TJX) , Abercrombie & Fitch (ANF) and Sears Holdings (SHLD) .

The consumer continues to be resilient. In the face of worries over rising costs, the XRT has managed to stick to its upward trajectory, establishing new highs for the year.

SPDR Dow Jones Industrial Average ETF (DIA)
The large-cap dominated Dow Jones Industrial Average has staged an impressive run-up recently. Over the past 30 days, shares of DIA have managed to outpace small- and mid- cap-linked ETFs such as iShares Russell 2000 Index Fund (IYM) and the iShares S&P 400 Mid Cap Index Fund (MDY) .

It is too soon to tell whether the business cycle has shifted in favor of large- and mega-caps. However, in the event that the market runs into turmoil, the size and stability of companies like International Business Machines (IBM) , Caterpillar (CAT) , and McDonalds (MCD) will likely prove popular, boosting the appeal of funds like DIA.

Disclaimer

Here are this week’s ETF winners and losers.

Winners

iPath Dow Jones UBS Sugar Subindex Total Return ETN (SGG) 4.9%
Despite a strong run-up heading into the start of 2011, this fast moving, futures-based sugar ETN has run into heavy headwinds this year. Since peaking in February, the ETN has struggled to regain footing, falling back to levels last seen in early October.

This week, however, the SGG got a shot of strength following reports that heavy rains were threatening Brazil’s output.

Single-commodity products like SGG tend to behave in a volatile manner and are therefore excessively risky for conservative investors. A stronger way to access the agriculture industry would be through a diversified futures fund like PowerShares DB Agriculture Fund (DBA) or an equity-backed product like Market Vectors Agribusiness ETF (MOO) .

iShares S&P North American Technology Technology-Software Index Fund (IGV) 2.7%
Impressive earnings from top players like Symantec (SYMC) and BMC Software (BMC) helped lift the IGV to industry-leading gains and new 2011 highs.

In addition to these reports, the software industry got plenty of time in spotlight following news that Microsoft (MSFT) is planning to acquire Skype. If completed, the proposed $8.5 billion deal would mark Microsoft’s largest acquisition ever.

SPDR S&P Retail ETF (XRT) 2.7%
The consumer scored a victory this week as the retail ETF headed to industry-leading gains. This win is particularly impressive considering the persisting headwinds for the global consumer. As we look ahead, I remain optimistic toward the consumer. However, rising commodity prices will continue to present a threat for ETFs like XRT.

Losers

Market Vectors Junior Gold Miners ETF (GDXJ) -5.9%

It’s been a rough May for the junior miner ETF. Since the start of the month, the fund has pulled back from 2011 highs and retreated to mid-March levels.

In the weeks ahead, precious metals-related ETFs will be interesting to watch. I continue to view gold as an attractive long-term bet. However, it is possible it could run into headwinds in the near term if the commodities shakeup persists.

iPath S&P 500 VIX Short Term Futures ETN (VXX) -4.8%
Despite the jittery market action in light of the continued commodities shakeup, the fear-tracking VIX ETN, VXX, ended the week with losses. This is a notable reversal from last week, when VXX sat toward the top of the ETF winners list.

Currently, VXX stands on the cusp of revising its previous all-time lows. Looking ahead, I continue to urge investors to steer clear of this product and others like it. While interesting to watch, assets such as dividend-paying equities are better options for investors looking for protection against market turmoil.

Global X Uranium ETF (URA) -3.8%
URA continues to struggle as consumer sentiment toward the uranium industry remains soured in light of the crisis still facing Japan. This past week, the fund retreated to levels seen during the initial aftermath following the Pacific earthquake.

Interestingly, although it is also designed to track the uranium industry, Van Eck’s Market Vectors Uranium+Nuclear Energy ETF (NLR) has exhibited impressive stability. The fund remains well off of its early March lows and fell only 1.7% over the past week.

Disclaimer

Here are this week’s ETF winners and losers.

Winners

Guggenheim Airline ETF (FAA) 5.2%
The transportation sector remains an interesting corner of the market to watch. Despite concerns about the detrimental impact of rising fuel prices, companies responsible for moving people and goods from place to place have enjoyed notable stability.

Airlines, in particular, have enjoyed strength, scoring FAA a spot among the week’s winners for the second week in a row. A combination of oil’s weakness throughout this week and a bout of strong earnings has helped provide this sector with some lift.

iPath S&P 500 VIX Short Term Futures ETN (VXX) 7.1%
The VIX-based ETNs managed to stage a comeback over the past week as sweeping commodity weakness and other factors rekindled investor fears.

As evidenced by the April flow report issued by the National Stock Exchange, VXX has become a popular product among investors. During the past month, the fund witnessed asset inflows totaling $400 million.

I urge conservative, long-term investors to continue to avoid this fund and other VIX-related products. While exciting to watch, these funds have seen rampant volatility on a number of occasions.

iShares Barclays 20+ Year Treasury Bond Fund (TLT) 1.7%
Market jitters sent investors pouring into long-term Treasuries last week. In response, TLT managed to power higher, breaking through its 50-day moving average. With the past week’s gains, the fund has returned to levels last seen at the start of December 2010.

TLT remains an attractive option for conservative investors looking to defend against market turmoil. It will be interesting to see whether the fund can maintain its current strength in the days and weeks ahead.

Losers

iShares Silver Trust ( SLV) -26.6%
The physically based SLV stood out as the biggest ETF loser this week, as sellers put an end to the precious metal’s dramatic multimonth ascension.

Silver was not alone in the dip, however. Fellow shiny resources including gold and palladium also witnessed declines, leading iShares Gold Trust(IAU) and ETFS Physical Palladium Shares(PALL) to losses.

In the days ahead, silver and other resources will likely be in the spotlight and may continue to prove volatile.

United States Oil Fund (USO) -14.0%
Oil was not left out of this week’s sweeping commodity downturn. As crude prices dipped below $100 per barrel, the futures-based USO broke lower and pierced its 50-day moving average for the first time since late February.

Fellow energy futures fund, United States Natural Gas Fund (UNG) ran into turmoil this week as well. The fund is currently volleying between its 200- and 50-day moving averages.

Like precious metals, energy will likely be closely watched in the week ahead. Investors looking to track oil and natural gas, however, should steer clear of USO and UNG. Equity-backed options such as iShares Dow Jones U.S. Oil Equipment & Services Index Fund (IEZ) and First Trust ISE Revere Natural Gas Index Fund(FCG) will likely prove to be more reliable options.

Market Vectors Russia ETF(RSX) -7.6%
Slipping crude prices put heavy pressure on energy-reliant international ETFs like RSX. This fund, designed to track the largest and most liquid components of the Russian marketplace, is headlined by oil and gas goliaths including Gazprom, Lukoil and Rosneft.

Canada was another nation that struggled this week in light of the commodities downturn. The iShares Dow Jones Canada Index Fund(EWC) boasts heavy reliance on the energy and materials sector.

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.

Commodities are staging a comeback after yesterday’s sweeping decline. Benefiting from both this and the broad market’s strength, precious metal miner ETFs are enjoying some of the day’s strongest upward action.

SIL and the Market Vectors Junior Gold Miners ETF (GDXJ) are topping the list.

Winners

iShares Silver Trust (SLV) 1.9%
Silver is pushing higher at the end of the week, helping SLV lock in its first day of gains this month. Despite the metal’s strength, however, SLV still has plenty of ground to cover before it returns to the breathtaking highs witnessed prior to this week’s steep selloff.

United States Oil Fund (USO) and United States Brent Oil Fund (BNO) are other notable commodities-related funds that are powering back from yesterday’s losses.

SPDR S&P Russia ETF (RBL) 2.3%
Strength across the commodities spectrum is boding well for resource-heavy nations like Russia. RBL, Market Vectors Russia ETF (RSX) and iShares MSCI Russia Capped Index Fund (ERUS) are closing out this tumultuous week on a strong note.

Other international ETFs are also witnessing strength, including iShares MSCI BRIC Index Fund (BKF) and iShares MSCI Pacific ex-Japan Index Fund (EPP) .

VIX-tracking ETFs such as VXX and iPath S&P 500 VIX Mid Term Futures ETN (VXZ) enjoyed a nice run up during the first week of May trading. The funds, however, have reversed in light of Friday’s market strength.

Despite their popularity in light of this jittery market, I urge conservative investors to steer clear of VXX and VXZ.

Losers

Teucrium Corn ETF (CORN) -1.0
Corn is facing a second bout of weakness, leading the futures-based CORN to slip below its 50-day moving average. Sugar is also taking a hit, dragging iPath Dow Jones UBS Sugar Subindex Total Return ETN (SGG) to losses.

The PowerShares DB Agriculture Fund’s (DBA) diversified index is proving itself today. Despite weakness from corn and sugar, the fund remains relatively unchanged.

iShares MSCI Spain Index Fund (EWP) -1.9%
A number of Europe-related ETFs are heading lower, pressured by reports that Greece is mulling the possibility of leaving the euro. Spain, one of the region’s most vulnerable components, is leading the retreat lower. The EWP has suffered losses every day this week.

Disclaimer

Although he has traditionally focused his attention on opportunities based in the U.S., Warren Buffett appears more than willing to make deals in other corners of the global marketplace as well. In recent months, the investor has spent time traveling abroad to countries including India and South Korea. Reportedly, a major goal of these trips has been to identify large acquisition targets.

One common quality seen across these and many of the other companies highlighted by

In the past, I have highlighted a variety of ETFs that are well designed to provide investors with access to the domestic populations of emerging markets. Using these funds, risk-tolerant investors may be able to prepare for the possibility of a Brazilian or Chinese Berkshire Hathaway acquisition down the road.

Products including Market Vectors Brazil Small Cap Index ETF (BRF) and Guggenheim China Small Cap ETF (HAO) are designed to share exposure to small-cap companies in Brazil and China respectively. As I’ve highlighted on a number of occasions, both of these funds are noticeably weighted toward consumer-focused industries. Additionally, given their small size, the companies comprising these indices likely do most of their business domestically. Therefore, their future performance will rely heavily on the strength of the nations’ consumer classes.

Although Buffett’s future acquisition plans ultimately remain uncertain, there is little doubt that, in the weeks and months ahead, this will be a hotly discussed topic. In the event that the Oracle of Omaha turns his attention to the emerging markets, funds such as BRF and HAO may be the products that end up receiving the strongest Buffett-inspired boosts.

Buffett’s company has more than $38 billion ready to be invested. In his letter to shareholders issued in late February, Buffett likened this pile of cash to a loaded elephant gun ready to be fired.

Aside from his future acquisition plans, however, another hotly discussed topic among Buffett fans is the controversial resignation of David Sokol. As more information becomes available in the weeks and months ahead, this topic will be sure to generate interest and debate from market commentators and Berkshire Hathaway (BRK.A) followers.

Disclaimer