"Counterintuitive" would seem to be a great word to describe how the energy group took the top spot among exchange traded fund groupings in the second quarter, while an energy-consuming group captured second place.
Twice as many ETF categories lost ground than classifications that moved higher during the year's second quarter.
Only seven ETF investment objectives managed to end the three-month period with gains, versus 14 that ended the period prefaced with minus signs, as shown in the accompanying table of ETF categories and leading funds in each classification.
With the persistent gusher in petroleum prices, it shouldn't be surprising that the energy/natural resources group ended as the only ETF investment objective with a double-digit percentage gain for the quarter -- 18.17% for the average fund in that sector.
What is surprising, with all the headlines about record oil prices, is that the best performing fund in the energy group isn't a petroleum play. The
Market Vectors Coal ETF
ballooned 52.03% during the quarter. Its largest holdings include
Joy Global Energy
Perhaps equally surprising is that while the top ETF grouping was comprised primarily of energy producers, the runner-up category was heavily represented by energy users. The utility sector, with an advance of 6.05% for the average member, captured second place among the ETF investment objectives.
The top utility ETF was the leveraged
ProShares Ultra Utilities
, top holdings of which include
Dominion Resources Inc.
FPL Group Inc.
The remaining five sectors that managed to stay above water all ended the quarter within a percentage point of where they started.
At the south end of the performance array, the ongoing credit crunch drove the average financial services ETF 14.35% lower during the quarter. But the "inverse-leveraged"
ProShares Ultra Financials
surged 33.28% for the quarter. The fund is up 57.22% for the first half of the year and is ahead 114.89% over the past 12 months.
The columns of data on the top performing ETFs in the various categories underscores the importance of selectivity in investments. While the non-U.S. equity group sagged 3.17% during the quarter, the
iShares MSCI Brazil Index Fund
vaulted 16.74%. Similarly, the global equity category surrendered an average of 2.13%, but the group's top performer,
Market Vectors Agribusiness ETF
-- propelled by the explosion in food prices -- spurted 15.15%.
MOO's top holdings include
Deere & Co.
Richard Widows is a senior financial analyst for TheStreet.com Ratings. Prior to joining TheStreet.com, Widows was senior product manager for quantitative analytics at Thomson Financial. After receiving an M.B.A. from Santa Clara University in California, his career included development of investment information systems at data firms, including the Lipper division of Reuters. His international experience includes assignments in the U.K. and East Asia.