The Most Dangerous ETFs Out There

Of additional concern for many highly specialized ETFs such as those on the list should be their anemic volumes of trading. Whereas ETFs such as the SPDR S&P 500 ETF(SPY) and the PowerShares QQQ(QQQQ) trade hundreds of millions of shares a day with average daily dollar volume in the billions, five of the funds on the list trade less than $1 million per day.

ETFs with low turnover of shares are susceptible to wide bid/ask spreads that result in relatively high effective transaction costs. In addition, market prices of low-volume funds are also prone to diverge from corresponding net asset values per share, again exposing buyers and sellers to additional trading costs.

SPECULATIVE ETFs/ETNs: DOUBLE-EDGED SWORDS
NAME, TICKER & TheStreet.com RATINGS GRADE	AUG-2008 TOTAL RET'N (%)	AUG-2008 AVG. DAILY SHARE VOL. (000)	AUG-2008 AVG. DAILY DOLLAR VOL. ($MIL.)	INCEPTION DATE
ENERGY AND COMMODITY ETF/ETN WINNERS
PowerShares DB Gold Double Sht ETN (DZZ) U	19.11	430.60	12.93	02/27/2008
iPath Brcly Cptl Glb Carbon Tot Ret (GRN) U	17.61	12.20	0.52	06/25/2008
PowerShares DB Commodity Double Sht (DEE) U	13.80	74.50	1.81	05/02/2008
PowerShares DB Crude Oil Dbl Sh ETN (DTO) U	13.78	1,120.10	34.41	06/16/2008
PowerShares DB Base Mtls Dbl Sh ETN (BOM) U	13.71	7.00	0.18	06/16/2008
ENERGY AND COMMODITY ETF/ETN LOSERS
iPath DJ AIG Energy Tot Ret Sub (JJE) U	-8.37	10.60	0.68	10/23/2007
PowerShares DB Crude Oil Dbl Lg ETN (DXO) U	-11.50	54.90	1.07	06/16/2008
PowerShares DB Commodity Double Lg (DYY) U	-11.64	20.90	0.51	05/02/2008
PowerShares DB Base Mtls Dbl Lg ETN (BDD) U	-12.72	8.10	0.19	06/16/2008
PowerShares DB Gold Double Lg ETN (DGP) U	-18.78	896.60	17.88	02/27/2008
Data as of 8/31/2008. Source: TheStreet.com Ratings For an explanation of our ratings, click here.

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