Every day I rank hundreds of ETFs based on a proprietary model that helps me determine which funds have performed best over a set period of time and which have the best chance to continue their trends. PowerShares Dynamic Networking ( PXQ): PXQ and rival iShares S&P North American Networking ( IGN) have gained momentum during the past quarter as shared components like Cisco ( CSCO) and F5 Networks ( FFIV) advanced. PXQ differs from IGN in portfolio construction. While PXQ is a capitalization-weighted index that favors large-cap names like Motorola ( MOT) and Research In Motion ( RIMM), PXQ uses "merit criteria," including fundamental growth, stock valuation and investment timeliness and risk factors to weight components. While IGN has bested PXQ for year-to-date return, 40.37% vs. 34.35%, respectively, IGN held up better during the difficult market last year. In exchange for missing 6% on the upside, PXQ's investors fell only 2.76% for the one-year period ending June 30 vs. a 16.86% drop in IGN. Both IGN and PXQ should benefit from the hefty stimulus funds allocated to the networking sector during the stimulus. As broadband access is extended and networking reaches more rural areas, networking ETFs should continue to grow. Market Vectors Coal ( KOL): KOL tracks the Stowe Coal Index, which includes a globally diversified pool of coal companies. The companies in the index engage in coal transport, equipment manufacturing and the production of clean coal. To be included in the index, the coal companies must be principally engaged in the coal industry, derive 50% of revenue from the coal industry, have a market cap exceeding $200 million and have a three-month average daily turnover greater than $1 million. Investors could see a "reflation" of commodity prices and a continued increase in momentum from KOL in the upcoming months. The Obama administration earmarked $1 billion for clean coal-maker Futuregen, and despite the recent pullout of two major investors, the project represents a government commitment to clean coal. Ohio uses coal to power 86% of its energy needs, according to a recent New York Times article, and coal is key to many energy intensive industries like steel.
In trading on Monday, shares of the PowerShares Dynamic Networking Portfolio ETF crossed below their 200 day moving average of $32.67, changing hands as low as $32.50 per share. PowerShares Dynamic Networking Portfolio shares are currently trading off about 1% on the day.