Top-Performing ETFs That Still Have Legs
09/12/08 - 01:37 PM EDT
Kevin Baker
Looking at the best-performing exchange-traded funds by objective in August, we can see which groups stood out from the crowd. Some have run their course, but others may be up for another lap or two.
The first two bullish standouts are a bit counter-intuitive amid talk of a recession and housing crisis. However, the Retail HOLDRs Trust(RTH Quote - Cramer on RTH - Stock Picks) bottomed in July and has extended gains into September. The U.S. government's stimulus checks helped bridge the gap to pre-holiday-season spending, supporting holdings of Wal-Mart(WMT Quote - Cramer on WMT - Stock Picks), Home Depot(HD Quote - Cramer on HD - Stock Picks), and Target(TGT Quote - Cramer on TGT - Stock Picks). While the Retail HOLDRs are trading at a reasonable average of 16.3 times earnings, homebuilders like Beazer Homes USA(BZH Quote - Cramer on BZH - Stock Picks) and Hovnanian(HOV Quote - Cramer on HOV - Stock Picks) have lost so much money, the aggregate P/E ratio of the SPDR S&P Homebuilders ETF(XHB Quote - Cramer on XHB - Stock Picks) can't be computed. Yet, the Homebuilders ETF did well in August and is building on its advance. Bargain-hunting investors calling a mid-July bottom to the stock, at its lowest point on record, are hoping most of the bad news in this sector has passed. The last two bullish picks are inverse funds that performed well in August and are continuing their climb in September as the underlying indexes slide lower. As the U.S. dollar rallies back to its highest level since September 2007, the price of dollar-denominated gold has dropped to the $740 an ounce level. And, the more the futures contracts tracked by the Deutsche Bank Liquid Commodity Optimum Yield Gold Index sink, the higher the 200% negatively leveraged PowerShares DB Double Short ETN(DZZ Quote - Cramer on DZZ - Stock Picks) spikes. Another 200% negatively leveraged fund had a good month in August. The UltraShort MSCI Emerging Markets ProShares(EEV Quote - Cramer on EEV - Stock Picks) gained 12.2% as the underlying MSCI Emerging Markets Index gave up 8.2%. If weakness expected in emerging markets materializes, the accelerated upward trend in this fund may have legs.
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