Seeking Alpha
ETF investing, independent research, tech
Profile| Send Message|
( followers)  

Each week, I like to publish the past week's hottest ETFs to share some new trends and niche ETFs out there and give investors some new ideas. This week, we saw strength in emerging markets and that Short Treasuries play, which I've loved since the beginning of the year. Of course, nobody can ignore the Swine Flu Stocks' manic volatility that will surely continue in the coming weeks (and who knows, perhaps a Swine Flu ETF is on the horizon?). But buyers beware - don't let the hype get ahead of the fundamentals in your trading decisions.

ELEMENTS BG Total Market ETN (BVT) - Up 16% - While this ETN turned in an impressive return last week, I get concerned about these Elements ETNs, especially following the bizarre behavior of the Gold Elements ETN that returned over 400% in a month when the real gold move was 16%. I've seen multiple products now diverge from reality and many retail investors that chase the seemingly high return get left holding the bag. Only 1800 shares changed hands Friday. I list it here in case you're considering buying it based solely on last week's return. Caveat Emptor.

Market Vectors Coal ETF (KOL) - Up 13% - With a 7% move on Friday, this ETF continued its tear for the prior 3 months, up over 40% vs. a single digit return for the S&P500. With glimmers of a US recovery in hand and coal being the practical source of energy in the US for the foreseeable future, regardless of political promises of "green energy, green jobs" and other worthless promises unsupported by market forces, the underlying companies have been rallying.

PowerShares DB Agriculture Dble Long ETN (DAG) - Up 12% - This Ag ETN was up over 8% on Friday alone and has roughly tracked the market going back the past several weeks, so last week was a breakout. It tracks an index which is meant to contain roughly equal percentages of corn, wheat, soybean, and sugar futures contracts. Note - supposed to be 2X if you didn't catch it in the name.

Direxion Daily 30-Year Treasury Bear 3x Shares (TMV) - Up 11% - This 3x leveraged ETF seeks to actually exploit improving market conditions that result from a flight FROM safety by driving up the yield (or price lower) on 30 year Treasuries. Recall that in 2008, we were seeing record lows for yields on Treasuries and in some cases, investors were accepting a negative yield on short dated securities just to have somewhere to stash their funds during the storm. At that time, my best recommendation (and personal move) was to short Treasuries with TBT, a 2X ETF. Now, the 3X is available via TMV. Make sure you understand that these are recommended for short term trades and not the best long term investments since it's based on daily volatility and you lose a fair amount of value over time due to fees and volatility daily.

Disclosure: Long TBT (2X short treasuries)

Source: 4 ETFs to Watch This Week