As Europe Wilts, Don't Eat These BUNS (EWU, EWN, EWP)

Our quest for the best in

takes a cautionary turn today to the developed markets side of the spectrum. Are there are legitimate opportunities in the world's developed nations for investors? The answer is "yes" with a "but" as in "Yes, but it depends on what developed markets one is evaluating." The S&P 500 has outperformed an array of developed market benchmark indexes this year, so it's safe to say the U.S. should be on anyone list of industrialized nations to invest in. Analysts also see value in markets such as

just name a pair. For better or worse, there are developed markets that, generally speaking, should be avoided over the near- to medium-term and there's a new acronym to help investors remember those countries: BUNS. As in Belgium, the U.K., the Netherlands and Spain. Looks look at the respective ETFs for each.

The iShares MSCI Belgium Investable Market Index, which is home $26.4 million in AUM, is a curous tale. EWK suffered through Belgium's credit downgrade

but the fund has been solid performer this year. The yield of 4.6% is also inviting, but EWK is a two-sided coin. One side is that Belgium has had its share of political problems, credit downgrades and the fund is sensitive to the fragile state of affairs in the Euro Zone. On the other side, Anhueser-Busch InBev

accounts for almost 27% of EWK's weight and if that stock performs well, EWK might (emphasis on "might") be insulated a bit from Europe's trials and tribulations.

How much longer EWU stays positive on the year is up for debate following news from earlier Wednesday that United Kingdom officially entered a double-dip recession, as its GDP fell 0.2% from the fourth quarter of 2011. Other woes exist for EWU in the form of its sector breakdown. Financials account for almost 18% of the fund's weight and investors' appetites for European bank stocks isn't robust at the moment. Energy and materials combine for another 31% of the ETF's weight and while that means high-quality names such as Royal Dutch Shell

and BHP Billiton

, that also means EWU needs high-beta stocks to be in favor to generate upside.

Home to an AAA credit rating, the Netherlands and EWN had the potential to be safe haven plays amid the drama that is Europe's sovereign debt calamity. There is one clear reason to avoid EWN for the time being: Markets hate uncertainty and markets have a pronounced distaste for political uncertainty, but that's exactly what the Netherlands is home to right now. Then there is the matter of EWN's weak chart. EWN is down 6.3% in the past month, resides below its 20- and 50-day moving averages and barely above its 200-day line.

Not surprisingly, EWP is the worst performer of the BUNS quartet and that also means a yield trap, er dividend yield of about 10%. The International Monetary Fund said today Spain may need for public funds to bolster its banks and identified 10 Spanish banks as vulnerable regarding bad loans. Don't forget Spain's surging borrowing costs. On Tuesday, the country sold a combined $2.6 billion in 3- and 6-month notes. The yields of 0.63% and 1.58% compare with 0.38% and 0.84%, respectively at the last auction, the Associated Press reported. For more on ETFs with downside potential, please click

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