This Week in ETFs: May 28 Edition

by on May 28, 2010 | ETFs Mentioned:

This week brought more ups and downs to uphold the uncertainty of what investors are calling “Grim May.” An up-and-down week ended on a negative note, with a downgrade of Spain increasing investor anxiety over the spread of the debt crisis beyond Greece. This week features the close of a tumultuous month for markets all over the world. With the Deepwater Horizon spill eclipsing the Exxon-Valdez, and the European debt crisis wreaking havoc on stocks, investors will not be sad to see this month come to a close.

In these interesting times, we highlight three of the best pieces of ETF writing from around the Web over the last week:

3 Steps for Fixing a Broken Investment Portfolio at ETFguide

With the average 401(k) balances roughly 11 percent lower than where it was three years ago, investors need  to “get their minds right” to start marking up the losses. Investors with their minds right are “decisive, responsible, reasonable, orderly, vigilant, discerning, deliberate, disciplined, patient, calm, prepared and educated,” writes ETF Guide. The first step to fix a flawed portfolio is reducing costs by making investments in ETFs or indexed mutual funds. The other necessary step is to get the right asset allocation mix. Investors need the right mix of funds to help lower risk and increase gains simultaneously.

Nickel Vs. Aluminum: Which Shines Brighter? at Hard Assets Investor

If one were to compare iPath Dow Jones-UBS Nickel Total Return Sub-Index ETN (JJN) and iPath Dow Jones-UBS Aluminum Total Return Sub-Index ETN (JJU), the funds price trajectories would be very similar, yet the returns of the two are vastly different. Where JJN has seen large gains over the past month, JJU has lagged behind. But the supply of nickel has decreased in recent weeks while the supply of aluminum has increased, giving JJU signs of life. Any investors looking into either nickel or aluminum should be aware that China plays a major role in the consumption and production of the two, and is an important country to watch for the performance of these ETNs. Volatility is also important to consider, with JJN being more mild in its jumps than JJU, both positive and negative.

Mining ETFs: Ready To Rally? at ETF Database

With the recent sell-off crisis and market downturns, few sectors have felt the blow more than the mining industry. This sector will typically see a bigger than average fall in economic downturns as demand for raw materials drops, but the recent pullback was particularly harsh. Another strike on mining funds in recent weeks as investors sold off risky assets and fled to safe havens, boosting the U.S. Dollar. While mining ETFs are volatile, they may have the potential for big gains in the current environment. If the dollar gives back gains on non-euro currencies, it could bode well for mining ETFs, including Dow Jones Emerging Markets Metals & Mining Titans Index Fund (EMT), SPDR S&P Metals & Mining ETF (XME), Global X Copper Miners ETF (COPX).

Disclosure: No positions at time of writing.