Energy Sector Again Dominates Top ETF List

The results for the best three-month performers in the TSC ETF universe is clearly stacked towards energy and natural resources. This is the only real sector that has yet to entertain the specter of an earnings downgrade in the current slaughterhouse that is the U.S. market.

Gasoline and commodity prices maybe driven in some part by speculation, which in turn is being fueled by loose monetary policy. It's likely that a low Fed funds rate is permitting a form of "commodity carry trade" to exist.

If the price of oil stays high, earnings for this sector will hold up much better at a time when the earnings from almost every other sector in the economy are likely to come under pressure and revised down. So we may see more of the same dominance of energy and natural resource ETFs going forward -- but how long this can last remains to be seen.

The top ETF was not, however, exposed to the oil market, but to coal -- in particular the Market Vectors Coal ETF(KOL), which is designed to generate results corresponding to the price and yield of the Stowe Coal Index.

For comedy relief we have the HOLDRS B2B Internet ETF(BHH) in second place, which is like a Model T Ford leading at Daytona. This is an absurd fund for absurd times, and it is the epitome of nondiversification, investing 90.6% of its assets in just one company: Ariba Incorporated(ARBA), which provides on-demand spend management solutions. ARBA is rated a SELL by TSC Ratings.

The fund also has 10% of its assets in the Internet Capital Group(ICGE) a provider of software and services to reduce transaction costs between firms. This company is rated a HOLD by TSC Ratings.

Fund Name	TICKER	TSC Grade	Category	3 Month Return	1 Month Return
Market Vectors Coal ETF	KOL	U	Sector - Energy/Natural Res	52.03	7.01
HOLDRS B2B Internet	BHH	C-	Growth - Domestic	45.95	-10.00
United States 12 Month Oil Fund	USL	U	Sector - Energy/Natural Res	45.27	11.77
PowerShares DB Oil Fund	DBO	C	Sector - Energy/Natural Res	41.27	11.58
PowerShares DB Energy Fund	DBE	C+	Sector - Energy/Natural Res	40.05	10.00
United States Oil Fund	USO	B-	Sector - Energy/Natural Res	39.70	10.29
iPath S&P GSCI Crude Oil Total Ret	OIL	C	Sector - Energy/Natural Res	39.27	10.20
ELEMENTS RIC Energy Total Return	RJN	U	Sector - Energy/Natural Res	39.13	10.08
ProShares Ultra Oil & Gas	DIG	A-	Sector - Energy/Natural Res	36.05	5.08
SPDR S&P Metals & Mining ETF	XME	B	Equity Income	35.71	8.07
iPath DJ AIG Energy Tot Ret Sub	JJE	U	Sector - Energy/Natural Res	35.47	10.84
First Trust ISE-Revere Natural Gas	FCG	C	Equity Income	34.09	6.91
ProShares Ultra Short Financials	SKF	C	Sector - Financial Services	33.28	41.99

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