Coal Funds Clean Up While Gas Leaks

NEW YORK (TheStreet) -- Exchange traded securities tied to the price of natural gas are leaking shareholder value.

The iPath Dow Jones-UBS Natural Gas Total Return Sub-Index ETN (GAZ), the worst-performing fund in the five trading days through Aug. 13, flamed off 7.6% of its market value. The exchange traded fund that tracks the performance of Henry Hub natural gas futures contracts, United States Natural Gas Fund LP (UNG), lost 5.5% of its value. Henry Hub natural gas dropped 12% during that time.

Low price for gas is dissuading utilities from converting to more environmentally friendly and more expensive solar and wind power. Five of the worst-performing funds focus on clean-energy companies.

Leading the pack lower was the Market Vectors Solar Energy ETF (KWT), which declined 4.9%. LDK Solar (LDK) and JA Solar Holdings (JASO), two holdings, each recorded declines of 21% after disappointing investors with quarterly losses. Other solar positions include China Sunergy (CSUN), off 14%; Solarfun Power Holdings (SOLF), also down 14%; and GT Solar International (SOLR), off 12%.

Worst-Performing Energy Funds for the Week Ending Aug. 13 Fund (Ticker) Rating Fund Type 1 Wk Tot'l Ret'n iPath Dow Jones-UBS Natural Gas Subindex Total Return ETN (GAZ) E- ETN -7.57% United States Natural Gas Fund LP (UNG) E- ETF -5.53% Market Vectors - Solar Energy ETF (KWT) E ETF -4.93% Claymore/MAC Global Solar Energy Index ETF (TAN) E ETF -4.05% ELEMENTS Linked to the CS Global Warming Index (GWO) C ETN -3.80% Guinness Atkinson Funds - Alternative Energy Fund (GAAEX) E- Open-End -2.92% Rydex Inverse 2X S&P Select Sector Energy ETF (REC) E- ETF -2.60% Direxion Daily Energy Bear 3X Shares (ERY) U ETF -2.59% ProShares Ultra DJ-AIG Crude Oil (UCO) U ETF -2.50% iShares S&P Global Clean Energy Index Fund (ICLN) E ETF -2.44% Source: Bloomberg & TheStreet.com Ratings

For the week ending Thursday, Aug. 13, the average energy sector fund inched up 1.1%, excluding inverse funds.

Some of the best performers were closed-end funds specializing in master limited partnerships, or MLPs, which collect oil and gas pipeline and other energy royalties. Most of the 7% increase in the value of the Tortoise North American Energy (TYN) closed-end fund wasn't associated with its holdings but rather with shrinkage in the discount at which the fund trades in comparison to its net asset value.

The second-best-performing energy fund is one of two that hoards coal stocks. The PowerShares Global Coal Portfolio (PKOL) added 6.4% for the five trading days under review. With half of U.S. electricity generation coming from the burning of coal, the expected economic recovery can only be good for coal stocks.

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