Three ETFs To Watch This Week: EWI, XRT, EU

by on June 11, 2012

After several weeks of dismal trading, markets finally managed to climb to positive territory despite increased levels of volatility. Investors anxiously awaited Fed Chairman Ben Bernanke’s testimony to Capitol Hill last week, only to be disappointed by the lack of a definite response on the issue of future quantitative easing measures. Bernanke indicated that the Fed is “still working” on whether or not they will take steps to boost economic growth. While the U.S. contemplates the possibility of future stimulus measures, the Euro Zone will place its focus on Spain this coming week as officials find the best way to support the recently downgraded country. As Euro Zone drama takes center stage once again, there will be plenty of headlines for investors to keep a close eye on [see 101 ETF Lessons Every Financial Advisor Should Learn].

MSCI Italy Index Fund (EWI)

Why EWI Will Be In Focus: This fund seeks to replicate the performance of the Italian equity market and is home to over $150 million in total assets. In terms of sector allocation, the fund is primarily invested in energy and financial services stocks, which together make up more than half of total assets. Italy, along with other plagued Euro Zone members, has struggled in recent years: EWI has lost a staggering 64.8% over the trailing five year period. Its focus this week will come on Monday when Italy’s GDP will be reported, giving a good outlook on the future of nation’s economy [see also 3 ETFs For a Euro Zone Double-Dip].


Why XRT Will Be In Focus: This fund offers exposure to the U.S. retail industry, a targeted sub-sector of the consumer discretionary space.  Top holdings include online travel sites Expedia and TripAdvisor, as well as book giant Barnes & Noble and clothing manufacturer American Eagle Outfitters. Following the recent trend of U.S. retail sales, XRT has slid more than 4% in the past three months, as consumers spent less money in this corner of the consumer discretionary market. XRT will be an important product to watch this week as U.S. Retail Sales and Conusmer Confidence are slated to be announced on Wednesday and Friday respectively [see also Beyond XLY: Considering Consumer Discretionary ETFs].

Euro Debt Fund (EU)

Why EU Will Be In Focus: This fund is the only ETF available on the market that provides a way for investors to gain pure play and broad-based exposure to European debt markets. EU’s portfolio consists of nearly 40 euro-denominated bonds, with heavier allocations towards the relatively “safer” Euro Zone countries of Germany and France. Its focus this week will come as Germany’s and the Euro Zone’s Consumer Price Indexes are announced on Wednesday and Thursday respectively. Given recent headlines surrounding the region’s ongoing debt drama, investors should keep a close eye on EU as it may exhibit higher levels of volatility this week [see also 3 ETF Trades For the Next Euro Zone Debt Crisis].

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Disclosure: Photo courtesy of Diliff. No positions at time of writing.