Uncertainty in Europe and a pullback in the prices of several classes of commodities have left both the euro and commodity plays in a world of hurt. The one notable exception to the downward trend in commodities has been the price of gold as investors have run for cover. The SPDR Gold Shares ETF (NYSE:GLD) is presently trading near its 52-week high. That being said, here are three beaten down ETFs looking for a lift.

IN PICTURES: Digging Out Of Debt In 8 Steps

Into an Abyss?
The euro is coming off of a recent four-year low which has meant bad news for holders of the CurrencyShares Euro Trust ETF (NYSE: FXE). FXE has fallen 14.7% year-to-date and may not be done yet. The European Central Bank has been battling to quell concerns surrounding the debt crisis in Greece and other European Union member nations.

Countries such as Greece, Portugal and Spain, which have been among the most adversely impacted, will ultimately need to come up with viable solutions to address their budget deficits before their problems will go away. Spain and Portugal have said that they will be able to reduce their budgets, but the question is: will the cuts be enough? Either way, the hysteria surrounding this trade made be overdone as seen in the slight uptick experienced by the euro on Monday.

Parting Ways
Although gold and oil have traded in lockstep for much of 2010, that trend went out the window as the price of crude has experienced a precipitous drop. The uncertainty in Europe has allowed gold to continue to run higher, but rising crude inventories and worries about a slowing economic recovery have punished the price of oil.

On Monday, oil traded below $70 per barrel for a short time as it hit its lowest point for the year. This movement has driven the United States Oil Fund (NYSE:USO) down 18% in the past month alone. It could be some time before this ETF turns around, but $70 per barrel is at the bottom of the range of what OPEC has deemed to be "reasonable."

Into the Scrap Heap
Another commodity play that has seen the bottom fall out in recent weeks has been steel. Investors in the Market Vectors Steel ETF (NYSE:SLX) have choked on a 18.2% loss over the course of the past month.

SLX may have more promise than the other two ETFs mentioned here. United States Steel (NYSE:X) which is a component of SLX was recently added to the Goldman Sachs conviction buy list. The analyst who made this call noted that steel inventories are sitting at historically low levels domestically. He also indicated that the uncertainty in the stock market did not necessarily warrant the recent pullback in the price of U.S. Steel shares.

The Bottom Line
Just because these ETFs have experienced dramatic declines does not mean that they are bound for a rally. There very well could be more pain in store in the short run. However, for investors who are confident that a long-term correction will eventually come to fruition, these are a few ETFs that might be worth a look. Patience is key. (These utility stocks offer strong dividends as well as the prospects of future growth. Check out Long-Term Utility Dividends.)

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

Related Articles
  1. Mutual Funds & ETFs

    Top Three Transportation ETFs

    These three transportation funds attract the majority of sector volume.
  2. Stock Analysis

    5 Cheap Dividend Stocks for a Bear Market

    Here are five stocks that pay safe dividends and should be at least somewhat resilient to a bear market.
  3. Investing Basics

    Tops Tips for Trading ETFs

    A look at two different trading strategies for ETFs - one for investors and the other for active traders.
  4. Investing

    How to Win More by Losing Less in Today’s Markets

    The further you fall, the harder it is to climb back up. It’s a universal truth that is painfully apparent in the investing world.
  5. Fundamental Analysis

    Use Options Data To Predict Stock Market Direction

    Options market trading data can provide important insights about the direction of stocks and the overall market. Here’s how to track it.
  6. Stock Analysis

    2 Oil Stocks to Buy Right Now (PSX,TSO)

    Can these two oil stocks buck the trend?
  7. Investing News

    What Alcoa’s (AA) Breakup Means for Investors

    Alcoa plans to split into two companies. Is this a bullish catalyst for investors?
  8. Mutual Funds & ETFs

    Top 4 Investment Grade Corporate Bonds ETFs

    Discover detailed analysis and information about some of the top exchange-traded funds (ETFs) that offer exposure to the investment-grade corporate bond market.
  9. Stock Analysis

    Top 3 Stocks for the Coming Holiday Season

    If you want to buck the bear market trend by going long on consumer stocks, these three might be your best bets.
  10. Investing News

    Could a Rate Hike Send Stocks Higher?

    A rate hike would certainly alter the investment scene, but would it be for the better or worse?
  1. Can mutual funds invest in IPOs?

    Mutual funds can invest in initial public offerings (IPOS). However, most mutual funds have bylaws that prevent them from ... Read Full Answer >>
  2. How do dividends affect retained earnings?

    When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
  3. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  4. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  5. Does index trading increase market vulnerability?

    The rise of index trading may increase the overall vulnerability of the stock market due to increased correlations between ... Read Full Answer >>
  6. What does a high turnover ratio signify for an investment fund?

    If an investment fund has a high turnover ratio, it indicates it replaces most or all of its holdings over a one-year period. ... Read Full Answer >>

You May Also Like

Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!