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3 Top Emerging Markets ETFs |
June 8, 2009 By Michael Shulman, Editor, ChangeWave Shorts |
Michael Shulman
Michael Shulman is the editor of ChangeWave Shorts, a newsletter advisory service that helps individual investors make money on the short side of the market.
Emerging Markets ETF #1:
United States Natural Gas Fund (UNG)
The belief in the growth of China and emerging markets is fueling overall speculation in oil and natural gas, as well as other commodities. The emerging markets trade is also putting pressure on the U.S. dollar, which, when it falls, also pushes the price of oil up.
So you want to play commodities as part of your emerging market trade — and the one with the best fundamentals right now is natural gas.
Natural gas, due to high inventories, is trading at near historic lows compared to oil. This environmentally friendly fuel will grow in value over time, so look at the United States Natural Gas Fund (UNG), the exchange-traded fund (ETF) for natural gas.
The short-term trade is a call option on the UNG; longer term, this ETF is a classic buy and hold.
Emerging Markets ETF #2:
ProShares UltraShort Lehman 20+ Year Treasury ETF (TBT)
The BRIC countries (Brazil, Russia, India, China) were on fire a while ago, and now they are again. As this investment trend remains hot in the short term (be ready to play the burst bubble longer term), you should consider shorting Treasuries.
Money flowing back into the emerging markets shows investors' willingness to take on more risk in any form. And the more they accept risk, the less they want Treasuries. Plus, Treasuries are tanking in expectations of inflation.
The ProShares UltraShort Lehman 20+ Year Treasury ETF (TBT) is a double inverse ETF — it goes up 2% when Treasuries fall 1%.
Emerging Markets ETF #3:
Market Vectors Agribusiness ETF (MOO)
As the standard of living increases in BRIC countries, demand for food will increase. The ETF for agricultural products has a great symbol MOO.
The Market Vectors Agribusiness ETF is a long-term play on more people wanting more and better food. Short term, the chart is a thing of beauty, and call options are reasonably priced.
Take advantage of the tremendous bull stampeding through China and the emerging markets with five more picks from the trading experts at OptionsZone.com. Get all five here.
