ETF Update
The Best and Worst Natural Resource Funds
Richard Widows
03/29/08 - 11:57 AM EDT
Natural resource prices may have given some investors whiplash in recent weeks -- so it seemed like a good time to look at the performance of funds in that sector for the period ended March 27.
Two weeks ago, oil and gold rocketed to new inflation-adjusted all-time highs. Any number of other grains and metals came along for the ride, prompting headlines about the major upward inflection in commodity prices.
Investors who joined the speculation were jolted back to reality the following week, as gold and oil skidded in a matter of a few days.
Those who thought the tumble signaled a reversal of the commodity inflation trend and took positions on the short side were then whipsawed this past week as petroleum, gold and a host of other tangibles retraced much of the ground that had been lost a week earlier.
The latest bounce was more than sufficient to cinch the energy/natural resources group as fund sector of the week. Its strength was broad-based. In addition to a rebound in crude, the Dow Jones coal mining index vaulted 11.47%, while the Dow's nonferrous metals gauge leaped 10.61%.
Ironically, the week's top energy/natural resources performer was of the "alternate energy" variety that would be expected to benefit from lowering dependency on stuff extracted from the earth. The Market Vectors Global Alternative Energy ETF(GEX Quote), which is nearly 70% invested outside the U.S., benefits from the erosion of the greenback as well as from technologies to lessen our dependency on the likes of coal and petroleum.
"Green" funds captured 30% of the top 10 energy/natural resources performers list, as GEX was joined by the Allianz RCM Global EcoTrends Fund(AECOX Quote) and the Calvert Global Alternative Energy Fund(CGAEX Quote). It raises the question of whether this could be a harbinger of the future of successful energy investing.
Despite the media focus on oil, other natural resource providers were represented on the roster of the top 10 performers. The Market Vector Coal ETF(KOL Quote) placed fourth, followed by the iPath Dow Jones-AIG Copper Total Return Sub-Index ETN(JJC Quote) and the iPathSM Dow Jones-AIG Nickel Total Return Sub-Index ETN(JJN Quote).
The energy/natural resources worst performers for the week were topped by a trio of "inverse" funds that move in the opposite direction of oil and natural gas. The ProShares Ultra Short Oil & Gas ETF(DUG Quote) tumbled 7.66% for the week, while the MACROshares Oil Down Tradeable Shares(DCR Quote) retreated 5.66%, and the ProFunds Short Oil & Gas Fund(SNPIX Quote) slipped 3.92%.
The fourth-worst performer in the group was the iPath Dow Jones-AIG Livestock Total Return Sub-Index ETN(COW Quote), which slipped -0.99% for the week.
Ironically, the only other fund in the energy/natural resources sector with a negative return for the week was a "green" entry, the BlackRock EcoSolutions Investment Trust(BQR Quote), off 0.77% for the period.
| Best-Performing Energy/Natural Resources Funds Ranked by returns for the week ending March 27, 2008 |
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| Fund | Ticker | Rating | Fund Type | 1 Week Total Return | ||
| Market Vectors Global Alternative Energy ETF | GEX | U | ETF | 11.20 | ||
| MLP & Strategic Equity Fund Inc. | MTP | U | Closed-End | 9.40 | ||
| Kayne Anderson MLP | KYN | B- | Closed-End | 8.90 | ||
| Market Vectors Coal ETF | KOL | U | ETF | 8.64 | ||
| iPath Dow Jones-AIG Copper Total Ret'n Sub-Index | JJC | U | ETF | 8.35 | ||
| iPathSM Dow Jones-AIG Nickel Total Ret'n Sub-Index | JJN | U | ETF | 7.90 | ||
| ProShares Ultra Oil & Gas | DIG | B+ | ETF | 7.73 | ||
| Allianz RCM Global EcoTrends Fd | AECOX | U | Open-End | 7.56 | ||
| Calvert Global Alternative Energy A | CGAEX | U | Open-End | 7.47 | ||
| BlackRock Global Resources Inv A | SSGRX | C | Open-End | 7.08 | ||
| Source: Bloomberg | ||||||
| Worst-Performing Energy/Natural Resources Funds Ranked by returns for the week ending March 27, 2008 |
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| Fund | Ticker | Rating | Fund Type | 1 Week Total Return | ||
| ProShares Ultra Short Oil & Gas | DUG | E- | ETF | -7.66 | ||
| MACROshares Oil Down Tradeable Shares | DCR | E- | ETF | -5.66 | ||
| ProFunds Short Oil & Gas Inv | SNPIX | U | Open-End | -3.92 | ||
| iPath Dow Jones-AIG Livestock Total Ret'n Sub-Index | COW | U | ETF | -0.99 | ||
| BlackRock EcoSolutions Investment Trust | BQR | U | Closed-End | -0.77 | ||
| Kayne Anderson Energy Tot Ret | KYE | C | Closed-End | 0.55 | ||
| BlackRock Comm Strategies A | MDCDX | C- | Open-End | 1.28 | ||
| Tortoise Energy Capital | TYY | E+ | Closed-End | 1.59 | ||
| FBR Gas Utility Index Fund | GASFX | A | Open-End | 1.64 | ||
| Fiduciary/Claymore MLP Opportunity Fund | FMO | C+ | Closed-End | 1.95 | ||
| Source: Bloomberg | ||||||
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