"Abenomics" helped kick start Japan's economy, boosting the country's gross domestic product above expectations. However, Japan exchange traded funds cooled on Thursday.

The WisdomTree Japan Hedged Equity Fund (DXJ) and db X-trackers MSCI Japan Hedged Equity Fund (DBJP) were both 1.1% lower Thursday.

Japan's economy expanded at an annual rate of 3.5% in the first quarter of the year, outpacing the 2.7% analyst projections, on greater consumer spending and exports, Bloomberg reports.

The positive data reveals that the reform efforts spearheaded by Prime Minister Shinzo Abe are working.

"'Abenomics' first report card did not disappoint," Izumi Devalier, an economist at HSBC, said in a CNNMoney article. "The Japanese economy is beginning to fire on all cylinders."

"This is undoubtedly very strong growth, and very positive for Japan's economy," Yoshiki Shinke, senior economist, Dai-Ichi Life Research Institute, said in a Reuters article. "It's no longer

Oil and gas exploration and production shares and exchange traded funds have been rallying as investors bet on a shale boom. Recent data released from the International Energy Agency is supporting the profitability of major oil service companies.

"In its 'Medium-Term Oil Market Report' released Tuesday, the IEA said the production onslaught will have impact on the oil market over the next five years as much as swelling Chinese demand did over the past 15 years. What's more, it will force companies to change how they transport, store and refine oil in addition to their investment strategies," Trang Ho wrote for Investor's Business Daily.

The shale boom will have a positive impact upon major oil service companies and independent service operators. Well-known companies such as Halliburton (HAL), Schlumberger (SLB) and Baker Hughs (BHI) are in line to profit, backed up with billion dollar research and development budgets, noted John

ETF Spotlight on the PowerShares CEF Income Composite Portfolio ETF (PCEF), part of an ongoing series.

Assets: $502.5 million.

Objective: The PowerShares CEF Income Composite Portfolio tries to reflect the performance of the S-Network Composite Closed-End Fund Index, which is comprised of closed-end funds that invest in taxable investment grade fixed-income securities, taxable high-yield fixed-income securities and others utilize an equity option writing (selling) strategy.

Holdings: Top holdings include Eaton Vance Tax-managed Global CEF 4.9%, AllianceBerstein Inc Fund CEF 3.2%, Eaton Vance Tax-Managed Dive CEF 3.7%, Allianz NFJ Dividend Inter CEF 2.4% and BlackRock Enhanced Equity Dividend CEF 2.3%.

What You Should Know:

• Invesco PowerShares sponsors the fund.
• PCEF has a 1.73% expense ratio.
• The fund has 142 holdings and the top ten make up 25.0% of the overall portfolio.
• The ETF has an SEC 30-day yield of 7.2%.
• Allocations include: bonds 44.1%, high-yield

Potential money market fund reforms could deter investors, triggering consolidation in the money market, and push others to alternative options, like short-duration bond exchange traded funds.

According to a Moody's Investors Service, we will likely witness a "reshaping of the industry," with providers forced to consolidate or exit the business, reports Joe Morris for Ignites.

"Any shift from the [constant net asset value] fund's ability to deliver its 'all-in-one' benefits will result in funds moving to a proliferation of products with differing risk characteristics to meet the multiple needs of the liquidity investor," the Moody's report said. "These products will include bank deposits, separately managed accounts, short-duration bond funds, cash-plus funds and cash exchange-traded funds."

The Securities and Exchange Commission has been working on a proposal to float the net asset value for institutional prime funds. Reform talks have gained momentum after SEC Chairman Mary Jo White

Japan's main stock index rallied more than 2% on Wednesday, as the Nikkei 225 climbed above 15,000 for the first time since 2008.

After years of languishing in stagnation and deflation, Japanese markets are back to financial crisis levels. With the Bank of Japan sticking to its accommodative measures, investors can take a look at two Japan exchange traded funds that hedge against a depreciating yen currency.

Investors who hold Japanese equities are exposed to currency risks - a depreciating yen will diminish the performance once converted to U.S. dollars. However, Japan yen-hedged stock ETFs help investors capture the upside while mitigating the negative effects of the weaker yen, including the The WisdomTree Japan Hedged Equity Fund (DXJ) and db X-trackers MSCI Japan Hedged Equity Fund (DBJP).

Under the new government led by Prime Minister Shinzo Abe, the country is actively fighting against deflation and economic malaise

Treasury Inflation-Protected Securities help investors hedge against the risks of diminished purchasing power although easy monetary policies by central banks have yet to stoke runaway inflation. If interest rates rise, investors would do better with global and short-term TIPS related exchange traded funds.

TIPS are a type of government issued Treasury security indexed to inflation. The par value would rise along with inflation, as measured by the Consumer Price Index.

The largest TIPS ETF, the iShares TIPS Bond ETF (TIP), provides exposure to inflation protected Treasuries, but the fund only has 36 holdings and a 8.16 year duration. TIP has a 12-month yield of 1.94%.

Duration is a measure of risk associated with increases in interest rates - if interest rates rise, bonds with higher durations would take a larger hit.

Alternatively, David Fabian of Fabian Capital Management suggests investors should consider short-duration and global TIPS instead.

For

The phenomenal success of WisdomTree Japan Hedged Equity (DXJ) has been a huge story in ETFs this year. However, WisdomTree Investments (WETF) also oversees a family of ETFs that take a different approach to popular dividend strategies.

The firm is "arguably the most innovative ETF provider out there," writes Andres Cardenal for The Motley Fool.

"In the world of dividend investing, most people usually think about big companies in conservative sectors, and most dividend ETFs typically go in that direction," Cardenal said. "But it sometimes pays to be creative, and dividend-weighted ETFs with a focus on smaller companies could be a better alternative in terms of generating superior returns in the long term."

One example is WisdomTree Trust SmallCap Dividend Fund (DES) which gives exposure to smaller company growth.

WisdomTree's index methodology for its U.S. dividend family is notably different than a market-capitalization weighted approach:

Fueled by the Bank of Japan's aggressive monetary policy, Japanese equities and exchange traded funds have made a robust run, but heavy-weight hedge fund manager Dan Loeb believes there is more to support Japan's rally.

Speaking at the Skybridge Alternatives, or "SALT," conference in Las Vegas last week, Dan Loeb, founder and CEO of Third Point hedge fund, stated that he was bullish on Japan's outlook, reports Stephen Gandel for CNNMoney.

While the BOJ's new quantitative easing measures is certainly supporting the current Japanese stock rally, Loeb points to other long-term trends. For instance, he believes the new political leadership could create a more efficient economy and improve growth. Specifically, Japan's new Prime Minister Shinzo Abe has promised to enact reforms that would change wages and bring more women to the workforce.

"It's the structural reform that we see that will be the big game changer," Loeb said.

The South Korea ETF has traded lower in the wake of an interest-rate cut from the Bank of Korea. The central bank lowered benchmark rates in a surprise bid to boost an economy heavily reliant on exports.

The iShares MSCI South Korea Capped Index Fund (EWY) is down 7.4% year-to-date. EWY is currently testing its 200-day exponential moving average.

The BOK lowered benchmark rates to 2.25% from 2.5%, its first cut in seven months, citing weaker-than-expected growth in China - South Korea's largest trading partner, slow growth in Europe and lower consumer price inflation, the Financial Times reports.

"This rate cut means that the Bank of Korea admits that the economy is not as good as they think," Jun Min-kyoo, of Korean Investment and Securities, said in a BBC article. "Slow economic growth and sluggish exports are critical for the rate decision."

South Korea's economy is heavily

Defensive sectors had been leading the rally in 2013 but the winds changed in recent weeks. If the shift to cyclical sectors continues, manufacturing and industrials exchange traded funds could move into high gear.

Currently, the Industrial Select Sector SPDR (XLI) has been falling behind the broader markets, returning 11.6% year-to-date, compared to the 14.0% performance of the S&P 500.

Investors have poured into non-cyclical stocks as an alternative to the historic low yields in government debt.

"They appear to be favoring less-risky cohorts - continuation the trend that has lasted for some time and one we think will remain driven by quantitative easing," Morgan Stanley's Adam Parker said in a research note.

Nevertheless, the housing recovery, shale fracturing boom, emerging market demand and low interest rates all support a rebounding manufacturing sector, writes Anjelica Tan for Kiplinger.

"The main subsectors covered in this ETF are aerospace and

Physically-backed gold exchange traded funds are used by investors as an easy alternative to buy the metal within the equities markets. However, the innovation in ETFs can also add to the selling pressure on gold.

"The ETF revolution set expectations very high and brought a lot of liquidity at first" to the commodity markets, said Kevin Kerr, president and chief executive officer of Kerr Trading International. "After all, the ETFs were much more palatable to the average equity investor who wanted to steer clear of futures or physical gold and silver."

Gold ETFs that hold the physical metal were credited for taking the commodity market to record highs over the past five years, reports Myra P.Saefong for MarketWatch. Gold prices recently dipped to the lowest levels seen in two weeks, at $1,421 per ounce, leading shares of the largest gold exchange traded fund SPDR Gold Trust (GLD)

The S&P 500 keeps rising and dividend exchange traded fund investors are feeling more confident as they start to favor growth over yield.

Over the past month, total returns of the two most popular dividend funds, the growth-minded Vanguard Dividend Appreciation ETF (VIG) and the value-oriented iShares Dow Jones Select Dividend ETF (DVY), have begun showing similar performances.

Over the past three months, VIG has lagged behind DVY by 1.8 percentage points, and over the past three years, the performance gap was 2.4 percentage points.

"Investors have been driving up valuations for dividend ETFs with the highest payouts, ignoring longer-term growth patterns," Carl Camp, president at Eclectic Associates, said in a Wall Street Journal article.

"Normally, firms with lower payout ratios and higher forecasted growth rates trade at premium valuations," according to Michael Rawson, a Morningstar analyst. "But investors have been turning those historic relationships

Investors keep a close eye on the S&P 500 and the blue-chip benchmark has climbed to new all-time highs. However, an ETF tracking an equal-weighted version of the S&P 500 has consistently beaten the index, due in part to the outperformance of U.S. mid-cap stocks.

Over the past 10 years, the Guggenheim S&P 500 Equal Weight ETF (RSP) has out returned on average 10.7%, compared to the 8.0% return of the SDPR S&P 500 ETF (SPY).

RSP has gained 17.2% year-to-date, 26.6% the past year, 17.1% the last three years (annualized) and 8.1% the past five years. In comparison, SPY has increased 15.2% year-to-date, 22.3% the past year, 16.0% the last three years and 5.5% the past five years.

"Despite owning mostly large-cap stocks, by equal-weighting them, the portfolio behaves more like a mid-cap fund, with a greater beta and volatility than a large-cap fund," Morningstar

The biotechnology sector has positive long-term implications and the indecision that loomed over the industry has subsided, according to S&P Capital. Exchange traded funds that track this sector are a sound choice for risk mitigation while gaining exposure to growth going forward.

"Now unlikely to be repealed, healthcare reform means some positive and negative things for the drug industry. Medicaid will start covering more people in 2014, which should be a positive for volumes and the drug industry. On the negative side, higher rebates already are in place for Medicaid patients, which are bad for biotechs because they mean biotechs see lower net prices for their drugs," Robert Goldsborough wrote for Morningstar.

ETFs have become the most efficient manner to invest in the biotechnology industry. Since many of the companies are small- or mid-cap and are generally start-ups, ETFs can mitigate risk while allowing investors exposure to

A popular master limited partnership exchange traded note has started to trade at a premium to its net asset value once again, highlighting additional risks associated with the ETN structure.

The JPMorgan Alerian MLP Index ETN (AMJ) was trading at a premium of around 3% late last week, with some traders attributing the run up to large option trades. The ETN had set an all-time high closing premium of 4.3%, according to the MoneyBeat blog at WSJ.com.

The issuing bank of the ETN halted new share creations due to the difficulty in hedging out MLP exposure, essentially turning the ETN into a closed-end fund. Consequently, premiums and discounts to net asset values can occur.

J.P Morgan has restricted the number of shares issued at 129 million on June 14, 2012 amid rising demand for AMJ as an alternative for yields.

"It matters because you have a lack

The Japanese yen exchange traded fund is at a new 52-week low as the currency weakens beyond the 100 per U.S. dollar psychological mark for the first time since 2009.

The CurrencyShares Japanese Yen Trust (FXY) was down 1.5% late Thursday. Year-to-date, FXY has declined 12.5% as the Bank of Japan enacted a more aggressive monetary policy and set a 2% inflation target.

The USD to Japanese yen exchange rate rose 1.7% Thursday to $100.67/¥. The last time the yen broke the $100 level was on April 14, 2009.

Japan's currency depreciated 3.5% since the start of April after Bank of Japan Governor Haruhiko Kuroda unexpectedly announced the central bank's decision to double monthly bond purchases and buy long-term debt in a bid to hit the 2% inflation goal, reports Kevin Buckland for Bloomberg.

Economists expected a 5.2 trillion yen monthly bond purchase program, but Kuroda came

A euro currency-hedged European stock exchange traded fund could begin to outperform if the European Central Bank makes good on hints at cutting interest rates even more.

ECB President Mario Draghi stated that policy makers will reduce interest rates further if needed after rates hit a record low 0.5% last week, Bloomberg reports.

"We will be looking at all the data that arrives from the euro-area economy in the coming weeks and if necessary, we are ready to act again," Draghi said in a speech. "Monetary policy will remain accommodative."

Moreover, the central bank will even contemplate taking the deposit rate into negative territory to stoke the economy.

"The Governing Council has decided for the first time to look openly at the possibility of reducing the interest rate on the deposit facility to less than zero," Draghi added. "There are many complications. There are many consequences that we must

ETF Spotlight on the Vanguard Materials ETF (VAW), part of an ongoing series.

Assets: $751.5 million.

Objective: The Vanguard Materials Fund tries to reflect the performance of the MSCI US Investable Market Index, which is comprised of commodity-related manufacturing industries, such as chemicals, construction materials, glass, paper, forest products and related packaging products, along with metals, minerals and mining companies.

Holdings: Top holdings include Monsanto (MON) 8.0%, Du Pont (DD) 6.6%, Dow Chemical (DOW) 6.1%, Praxair (PX) 5.2% and Freeport-McMoRan (FCX) 5.2%.

What You Should Know:

• Vanguard Group sponsors the fund.
• VAW has a 0.14% expense ratio.
• The fund has 135 holdings and the top ten make up 47.1% of the overall portfolio.
• The stock portfolio has a price-to-earnings of 13.56.
• The ETF has a 1.77% 12-month yield.
• Sub-sector allocations include aluminum 1.6%, commodity chemicals 5.0%, construction materials 2.5%, diversified chemicals 19.4%, diversified metals &

Emerging market bond exchange traded funds are presenting opportunity due to the low debt load most related economies have. They are selling at good discount rates, presenting opportunity for the coming years.

"In the current low interest-rate environment, many investors are searching for opportunities to diversify their bond portfolios and earn extra income given the paltry yields offered by U.S. Treasuries. As a result, emerging-markets bonds have seen impressive asset flows and have become a larger portion of investors' portfolios in the past few years," John Gabriel wrote for Morningstar.

ETFs such as the iShares Emerging Markets USD Bond ETF (EMB) or the PowerShares Emerging Markets Sovereign Debt Portfolio (PCY) have suffered slight losses of 1.5% each in 2013, but have made incremental comebacks over the past month. PCY is up 1.1% over a one-month time period, while EMB is up 0.7% over the past month.

Helping fixed-income investors diversify portfolio holdings with international exposure, Invesco PowerShares plans to launch a local currency emerging market bond exchange traded fund.

The PowerShares Fundamental Emerging Markets Local Debt Portfolio (PFEM) will begin trading Thursday, May 9. The fund has a 0.50% expense ratio and provides yield distributions monthly.

PFEM is linked to Rob Arnott's Research Affiliates' fundamental indexing methodology - the ETF passively tracks the index, but the benchmark is a type of rules-based index that mimics actively managed strategies.

The ETF will try to reflect the performance of the Citi RAFI Bonds Sovereign Emerging markets Extended Local Currency Index, which includes emerging market debt and weights holdings based on a country's population, GDP, energy consumption and land area.

"This approach breaks the link between portfolio weight and any over- or undervaluation, creating the potential for more efficient portfolio," according to an emailed note.

In contrast, a