The Best and Worst Natural Resource Funds

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 ETFGEX, 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 FundAECOX and the Calvert Global Alternative Energy FundCGAEX. 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 ETFKOL placed fourth, followed by the iPath Dow Jones-AIG Copper Total Return Sub-Index ETNJJC and the iPathSM Dow Jones-AIG Nickel Total Return Sub-Index ETNJJN.

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 ETFDUG tumbled 7.66% for the week, while the MACROshares Oil Down Tradeable SharesDCR retreated 5.66%, and the ProFunds Short Oil & Gas FundSNPIX slipped 3.92%.

The fourth-worst performer in the group was the iPath Dow Jones-AIG Livestock Total Return Sub-Index ETNCOW, 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 TrustBQR, off 0.77% for the period.

Best-Performing Energy/Natural Resources Funds Ranked by returns for the week ending March 27, 2008
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
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

1 What would best describe your stance heading into the coming week of trading? Bullish Bearish Neutral 2 Which of these sectors do you think is set to move up in the coming week? --Choose One--Aerospace and DefenseAirlinesAutomobilesBeverages and Food ProductsBiotechnologyCommercial BanksComputers and PeripheralsConsumer NondurablesEnergy Equipment & ServicesHMOs and HospitalsHomebuildingInsuranceIntegrated OilInternet, Software ServicesInvestment Bankers and BrokersMediaMultiline RetailPharmaceuticalsPrecious MetalsSemis, Semi EquipmentTelecom EquipmentTobacco and AlcoholWireless CommunicationsUtilities 3 Which of these sectors do you think is set to move down in the coming week? --Choose One--Aerospace and DefenseAirlinesAutomobilesBeverages and Food ProductsBiotechnologyCommercial BanksComputers and PeripheralsConsumer NondurablesEnergy Equipment & ServicesHMOs and HospitalsHomebuildingInsuranceIntegrated OilInternet, Software ServicesInvestment Bankers and BrokersMediaMultiline RetailPharmaceuticalsPrecious MetalsSemis, Semi EquipmentTelecom EquipmentTobacco and AlcoholWireless CommunicationsUtilities View the results without voting