'Short' Energy ETF Is a Real Gusher

TSC Ratings provides exclusive stock, ETF and mutual fund ratings and commentary based on award-winning, proprietary tools. Its "safety first" approach to investing aims to reduce risk while seeking solid outperformance on a total return basis.

ProShares Short Oil & Gas ( DDG) is an exchange traded fund that received one of TheStreet.com Ratings' highest marks in an initial ranking. Forty-one ETFs that accrued a sufficient track record of risk and performance data by the end of June got ratings for the first time.

The ProShares energy fund, which rose 24% in the 12 months through June, attempts to track the inverse of the daily performance of the Dow Jones U.S. Energy Sector Index, whose members have fallen over the past year.

At this time last year, the spot price of Light Louisiana Sweet Crude Oil was peaking at around $150 a barrel, stoking the bullish sentiment of oil-patch stocks. Since then, SandRidge Energy ( SD) has declined 83%, Halliburton ( HAL) has more than halved, Chevron ( CVX) has dropped 23% and Exxon Mobil ( XOM) has decreased 14%.

University of Calgary professor Philip K. Verleger Jr., who runs PKVerleger LLC, said last week that oil could drop to $20 a barrel if growing stockpiles aren't dealt with soon. PKVerleger is an economic consultant on energy and commodity markets.

Still, crude oil rose for a fourth day today on speculation demand will increase as global economies recover. Oil has gained 44% this year.

Two other newly rated ETFs are iShares FTSE China Hong Kong Listed Index Fund ( FCHI) and iPath DJ UBS Sugar Total Return Sub-Index ETN ( SGG).

Research Methodology

TheStreet.com Ratings condenses the available fund performance and risk data into a single composite opinion of each fund's risk-adjusted performance. This allows the unbiased identification of those funds that have historically done well and those that have underperformed the market. The ratings provide a solid framework for making informed investment decisions.
Newly Rated ETFs
Fund (Ticker) Initial Rating
Objective
Total Return 1 Year
WisdomTree Dreyfus SA Rand Fd (SZR) A+
Non-US Equity
12.1%
Proshares Short Oil & Gas (DDG) B+
Equity Income
23.5%
iShares FTSE China Index Fd (FCHI) B
Non-US Equity
-8.2%
iPath DJ UBS Sugar Tot Ret Sub (SGG) B-
Energy/Natural Res
-3.2%
PowerShares DB Crude Oil Short ETN (SZO) B-
Growth - Domestic
126.1%
PowerShares DB Base Metals Sht ETN (BOS) B-
Precious Metals
39.3%
PowerShares NASDAQ Internet Portf (PNQI) C+
Equity Income
-17.0%
PowerShares DB Base Mtls Dbl Sh ETN (BOM) C+
Precious Metals
72.5%
iPath DJ UBS Lead Tot Ret Sub (LD) C+
Energy/Natural Res
4.5%
PowerShares DB Crude Oil Dbl Sh ETN (DTO) C+
Growth - Domestic
275.5%
Claymore/BNY Mellon Frontier Mrkts (FRN) C+
Global Equity
-33.7%
iShares S&P Global Nuclear Index Fd (NUCL) C+
Energy/Natural Res
-25.4%
Powershares NASDAQ-100 BuyWrite (PQBW) C+
Equity Income
-18.2%
WisdomTree Dreyfus NZ Dollar Fd (BNZ) C+
Non-US Equity
-12.6%
iPath DJ UBS Tin Tot Ret Sub (JJT) C
Energy/Natural Res
-33.3%
iPath DJ UBS Precious Mtls Tol Ret (JJP) C
Energy/Natural Res
-9.5%
iPath DJ UBS Softs Tot Ret Sub (JJS) C-
Energy/Natural Res
-22.4%
ELEMENTS - S&P CTI ETN (LSC) C-
Growth - Domestic
-4.6%
Vanguard Total World Stock ETF (VT) D+
Emerging Market Equity
-27.8%
iPath DJ UBS Platinum Tot Ret Sub (PGM) D
Energy/Natural Res
-42.9%
iPath Brcly Cptl Glb Carbon Tot Ret (GRN) D
Energy/Natural Res
-51.2%
iPath DJ UBS Cotton Tot Ret Sub (BAL) D
Energy/Natural Res
-32.5%
Rydex Invrs 2x S&P Sel Sctr HlthCre (RHO) D
Health/Biotechnology
-2.6%
Rydex 2x S&P Sel Sctr Hlth Care ETF (RHM) D-
Health/Biotechnology
-35.2%
iShares S&P Glb Timber & Forestry (WOOD) D-
Global Equity
-37.5%
PowerShares DB Base Metals Long ETN (BDG) D-
Precious Metals
-39.1%
iPath DJ UBS Cocoa Tot Ret Sub (NIB) D-
Energy/Natural Res
-22.4%
iPath DJ UBS Coffee Tot Ret Sub (JO) D-
Energy/Natural Res
-31.6%
Proshares Short Financials (SEF) D-
Financial Services
-21.8%
Rydex 2x S&P Select Sctr Tech ETF (RTG) D-
Growth - Domestic
-47.1%
First Trust ISE Glb Wind Energy Idx (FAN) E+
Energy/Natural Res
-48.1%
iShares S&P Global Clean Energy Ind (ICLN) E
Energy/Natural Res
-52.0%
PowerShares DB Crude Oil Long ETN (OLO) E
Growth - Domestic
-54.8%
Rydex Invrs 2x S&P Sel Sctr Eng ETF (REC) E
Energy/Natural Res
-1.2%
iPath DJ UBS Almin Tot Ret Sub (JJU) E-
Energy/Natural Res
-53.3%
Rydex 2x S&P Select Sctr Energy ETF (REA) E-
Energy/Natural Res
-80.8%
PowerShares DB Base Mtls Dbl Lg ETN (BDD) E-
Precious Metals
-69.1%
Rydex 2x S&P Select Sctr Finl ETF (RFL) E-
Financial Services
-85.5%
Rydex Invrs 2x S&P Sel Sctr Tch ETF (RTW) E-
Growth - Domestic
-12.1%
PowerShares DB Crude Oil Dbl Lg ETN (DXO) E-
Growth - Domestic
-85.5%
Rydex Invrs 2x S&P Sel Sctr Fin ETF (RFN) E-
Financial Services
-77.2%
Source: Bloomberg & TheStreet.com Ratings

Funds rated A or B are considered "buy" based on a track record of higher-than-average risk-adjusted performance. Funds at the C level are rated as "hold," while underperformers at D and E are "sell."

For more information, check out an explanation of our ratings.
Kevin Baker became the senior financial analyst for TSC Ratings upon the August 2006 acquisition of Weiss Ratings by TheStreet.com, covering mutual funds. He joined the Weiss Group in 1997 as a banking and brokerage analyst. In 1999, he created the Weiss Group's first ratings to gauge the level of risk in U.S. equities. Baker received a B.S. degree in management from Rensselaer Polytechnic Institute and an M.B.A. with a finance specialization from Nova Southeastern University.