Energy Sector Again Dominates Top ETF List

The winner, though, isn't about oil -- it's a fund that invests in coal companies.
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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) - Get Report

, 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

Sam Patel, CFA, is the manager of mutual fund research for the TheStreet.com Ratings.

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