This past week featured volatility that has become all too familiar to investors. The week started off on a strong note as news from the euro-zone seemed to point in a positive direction, only to have the exact opposite reaction on Wednesday. After a shaky guidance from Europe hit home in the middle of the week, equities tanked by more than 3.5%, marking one of their worst single-day losses in recent memory. Luckily markets were able to claw back from their losses with a strong trading session to close out the week. Oil was one of the most talked about assets this past week, as the fossil fuel finished the week around the $99/barrel mark and seems to have all the momentum necessary to break through the triple-digit barrier [see also PIMCO Debuts Germany, Canada Bond ETFs].
Next week will hinge on a slew of data from the euro-zone, as all eyes are once again fixated on that region of the globe. In light of a busy week ahead, we outline three ETFs to keep a close eye on as the week unfolds.
MSCI Japan Index Fund (EWJ)
Why EWJ Will Be In Focus: This ETF tracks the performance of the Japanese equity market and was in the limelight for the beginning of 2011 as the country was forced to deal with a devastating tsunami, pushing this ETF down nearly 15% on the year. This week will bring EWJ back into focus as Japan is set to release important data that will be a big mover not only for this fund, but for the entire global economy. First, Japanese GDP comes in on Monday, and while last quarter saw a dip of 2.1%, this quarter is predicted to see a jump of 6%; a healthy boost for the economy. Later in the week the Japanese central bank will also be releasing their interest rate decision, making this ETF a good one to watch as the week unfolds [see also Italy ETF Slaughtered: Time To Sell?].
Daily 2x VIX Short-Term ETN (TVIX)
Why TVIX Will Be In Focus: After last week’s heavy volatility, this product makes for an ideal candidate for the coming week. TVIX features a 2X leverage on VIX futures, meaning that it will be one of the most volatile funds available on the market. For example, while major indexes sank more than 3.5% on Wednesday, this ETF returned an astonishing 37.4%, giving traders returns that could be found nowhere else in the space. This product will obviously be extremely dangerous and should never be bought unless there is the intention to constantly monitor the position. But for active traders, there is a major opportunity to produce handsome short term gains using TVIX. Look for this product to be active with the release of key European economic data on the horizon [see also ETF Insider: Rome Wasn’t Built In A Day].
European ETF (VGK)
Why VGK Will Be In Focus: This ETF tracks the largest common stocks from all over Europe. Top holdings in the fund include Nestle, Vodafone, and Rio Tinto, giving it the who’s-who of European companies. This coming week will feature a number of key economic releases that will make VGK active virtually every trading session. This week will see German GDP, Euro-zone GDP, Euro-zone CPI, and U.K. jobless claims, bringing the potential for high movements in this ETF. With all of the turmoil that has surrounded these nations as of late, it would not be surprising to see one of these releases fall short of its marks and send VGK tumbling. But if reports come in as predicted, VGK may get a major boost on the trading week [see also Turkey ETF Looks Delicious].
Disclosure: Photo courtesy of Joseph Plotz. No positions at time of writing.