3 ETFs To Watch This Week: GERJ, EU, TIP

by on August 13, 2012 | ETFs Mentioned:

Anticipation was the name of the game last week, as investors waited for any news concerning central bankers’ future actions. With no significant headlines or economic reports, markets struggled to find a definitive direction, eventually ending slightly higher at Friday’s close. Markets are chock full of evidence pointing to the global economy being in a much more significant slowdown, and investors are looking to the Fed and the ECB to step in and pick up the economic slack. But until any concrete developments are made, markets will likely continue to drift aimlessly. The coming week will see a number of major economic reports, including GDP and inflation data from around the globe. Below, we outline three ETFs that should see a fair amount of activity during the week ahead [see also 4 "Recession Proof" ETFs].

1. Market Vectors Germany Small-Cap ETF (GERJ)

Why GERJ Will Be in Focus: This fund offers exposure to the small capitalization segment of the German equities markets, allowing investors to make a more “pure play” on the nation’s local economy. Germany has continued to be a stronghold amidst eurozone debt crisis and, as such, GERJ has gained just over 15.2% thus far in 2012. Its focus this week will come on Tuesday when Germany’s GDP will be reported, giving a good outlook on the future of the nation’s economy. Analysts are expecting GDP to come in at 0.9% versus the previously recorded 1.7% growth [see also Global Titans ETFdb Portfolio].

2. Euro Debt Fund (EU)

Why EU Will Be In Focus: This fund offers a way for investors to gain pure play exposure to European debt markets. Currently, EU has a heavy tilt towards debt securities from the “safer” European countries such as Germany, France, Luxembourg and Belgium. Investors should keep a close eye on EU this week as the eurozone’s gross domestic product is reported on Tuesday; analysts expect GDP to come in slightly lower than the previously recorded growth rate of 0.0%. Depending on the outcome, EU could experience higher levels of activity.

3. Barclays TIPS Bond Fund (TIP)

Why TIP Will Be in Focus: Treasuries have been in the spotlight recently as last week’s dismal government auction of 3, 10, and 30-year bonds failed to attract significant demand. This week, U.S treasury inflation-protected securities and TIP will come into focus as the U.S. CPI is reported on Wednesday. Two months ago, consumer prices rose 1.7%. Analysts expect the report to show that inflation eased to 1.5% in the month of July [see also 17 ETFs For Day Traders].

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Disclosure: No positions at time of writing.