Trends I'm Watching

Best Performing ETFs for the Past Week

Trend: MacroShares Major Metro Housing Up (UMM) led the one week performance (+15%). iPath DJ AIG Lead TR Sub-Idx ETN (LD) and Direxion Daily Real Estate Bull 3X Shrs (DRN) were the second and third best performers, respectively.

The 20 ETFs with the best one week performance through 8/28/2009 tracked by Morningstar are shown below.

Source: MSN Money Exchange Traded Funds (ETFs) Performance Tracker

Name	Ticker	Category	Holdings	Morningstar	Last Price*	1-Wk	4-Wks	13-Wks	YTD	52-Wks	3-Yrs	5-Yrs
MacroShares Major Metro Housing Up	UMM	Specialty - Real Estate			$27.13	15.45	35.99	N/A	N/A	N/A	N/A	N/A
iPath DJ AIG Lead TR Sub-Idx ETN	LD	Specialty - Natural Resources			$56.34	11.80	12.10	38.56	97.87	4.86	N/A	N/A
Direxion Daily Real Estate Bull 3X Shrs	DRN	Specialty - Real Estate			$116.08	11.19	N/A	N/A	N/A	N/A	N/A	N/A
Direxion Daily 30 Yr Trs Bull 3X Shares	TMF	Government Bond - Treasury			$43.71	10.30	18.68	15.21	N/A	N/A	N/A	N/A
iPath DJ AIG Sugar TR Sub-Idx ETN	SGG	Specialty - Natural Resources			$71.62	8.89	27.26	42.67	76.49	37.33	N/A	N/A
Direxion Daily Small Cap Bull 3X Shares	TNA	Small Company	holdings		$40.31	8.66	18.45	63.18	21.05	N/A	N/A	N/A
Ultra Semiconductor ProShares	USD	Specialty - Technology	holdings		$28.73	8.62	8.87	53.79	103.42	-38.33	N/A	N/A
Ultra Silver ProShares	AGQ	Specialty - Precious Metals	holdings		$45.98	7.98	12.83	-10.42	45.97	N/A	N/A	N/A
Claymore/S&P Global Dividend Opp	LVL	World Stock	holdings		$13.30	7.23	10.83	20.31	48.15	-13.38	N/A	N/A
iShares Dow Jones US Home Construction	ITB	Specialty - Real Estate	holdings		$13.48	7.18	13.61	33.90	37.44	-11.55	-26.06	N/A
ELEMENTS CS Global Warming ETN	GWO	Specialty - Natural Resources			$7.15	6.91	3.35	27.26	38.12	-20.88	N/A	N/A
UltraShort MSCI Brazil ProShares	BZQ	Growth	holdings		$44.00	6.67	-9.13	N/A	N/A	N/A	N/A	N/A
Ultra Consumer Services ProShares	UCC	Specialty - Unaligned	holdings		$27.68	6.45	13.74	30.76	36.01	-34.31	N/A	N/A
PowerShares DB Agriculture Dble Long ETN	DAG	Specialty - Natural Resources			$9.79	6.30	11.12	-14.50	-3.74	-51.61	N/A	N/A
Ultra Financials ProShares	UYG	Specialty - Financial	holdings		$5.77	6.30	31.05	51.86	-3.82	-70.56	N/A	N/A
iShares FTSE NAREIT Industrl/Offc Cp Idx	FIO	Specialty - Real Estate	holdings		$21.73	6.09	21.06	37.87	16.00	-37.60	N/A	N/A
SPDR KBW Mortgage Finance	KME	Specialty - Financial			$43.78	5.95	12.78	23.97	N/A	N/A	N/A	N/A
Claymore/Zacks Intl Multi-Asset Income	HGI	Foreign Stock	holdings		$16.46	5.72	8.58	18.40	35.55	-9.81	N/A	N/A
ELEMENTS SPECTRUM Lg Cap U.S. Sector ETN	EEH	Growth			$7.40	5.69	2.02	16.31	11.34	-19.92	N/A	N/A
Ultra Russell1000 Value ProShares	UVG	Growth	holdings		$20.54	5.51	13.83	35.99	12.45	-49.44	N/A	N/A

Disclosure: We may own any EFT above at any time.

Please verify the performance of any ETF before investing,

The Gap Between the Stock Market and the Economy

Trend: The S&P 500 is up over 50% since early March, while most of the measures of the U.S. economy show weakness. This gap between the stock market and the economy cannot continue indefinitely.

Either the stock market will be pulled down by the weak economy, or, the stock market is a leading indicator and the economy is starting to rebound.

If you believe that the economy will pull the stock market down, you will be prepared for a downturn. On the other hand, if you feel that the stock market is indeed a leading indicator and the economy will start to rebound soon, you will be investing in "bargain" stocks for the run up.

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You can find experts and indicators to support both views.

The Optimistic View

Optimists see the new bull market "climbing a wall of worry" that will drive stock prices much higher. The Fed has made all the right moves to prevent a financial collapse. The recessionary pressures are easing as consumers are starting to spend again. New home sales have stopped dropping. The Leading Economic Indicators have turned up. So far, 480 of the S&P 500 companies reported earnings. Total earnings are down 28% from the 2nd quarter last year. But an amazing 73% of the companies posted better than expected earnings. Only 9% were in line with expectations and a very low 19% failed to meet or beat expectations.

The Pessemistic View

Pessimists warn that the real problems of the economy have not been solved by the Fed's easy money policy, by the big bank rescues or by the stimulus programs. The aftermath of the financial crisis — too much bad debt, overleverage, a sick banking sector, and an over-stretched consumer — are still with us. The rally has been strong and it is showing signs of slowing down, but it’s hardly unprecedented. The greatest stock market rally in history makes the current run-up look quite tame: in 1932 the Dow soared 111% in just 98 days.

Bottom Line

Stock market commentators may say the recession is over, but local and state economic indicators do not support that assessment. The stock prices of companies that are dependent on consumers and businesses in the United States cannot grow faster than the fundamentals of those companies for an extended period. If the economy rebounds, we would expect stock market gains to moderate. However, if the economy does not improve, we would expect the U.S. stock market to be pulled down by the revenue weaknesses of the underlying companies.

Best Performing ETFs for the Past Week

Trend: Direxion Daily Real Estate Bull 3X Shrs (DRN) led the one week performance (+11%). Ultra DJ-AIG Crude Oil ProShares (UCO) and Direxion Daily 30 Yr Trs Bull 3X Shares (TMF) were the second and third best performers, respectively.

The 20 ETFs with the best one week performance through 8/21/2009 tracked by Morningstar are shown below.

Source: MSN Money Exchange Traded Funds (ETFs) Performance Tracker

Name	Ticker	Category	Holdings	Morningstar	Last Price*	1-Wk	4-Wks	13-Wks	YTD	52-Wks	3-Yrs	5-Yrs
Direxion Daily Real Estate Bull 3X Shrs	DRN	Specialty - Real Estate			$106.87	11.19	N/A	N/A	N/A	N/A	N/A	N/A
Ultra DJ-AIG Crude Oil ProShares	UCO	Specialty - Natural Resources	holdings		$12.96	9.83	16.65	25.70	-5.33	N/A	N/A	N/A
Direxion Daily 30 Yr Trs Bull 3X Shares	TMF	Government Bond - Treasury			$39.63	9.29	13.96	-7.41	N/A	N/A	N/A	N/A
Direxion Daily Energy Bull 3X Shares	ERX	Specialty - Natural Resources	holdings		$35.63	8.30	12.33	17.68	-8.18	N/A	N/A	N/A
PowerShares DB Crude Oil Dble Long ETN	DXO	Specialty - Natural Resources			$4.86	7.05	15.17	32.43	90.59	-76.12	N/A	N/A
Rydex 2x S&P Select Sector Energy	REA	Specialty - Natural Resources	holdings		$17.42	6.87	10.11	15.96	8.31	-69.06	N/A	N/A
Market Vectors Environmental Svcs ETF	EVX	Specialty - Unaligned	holdings		$40.27	6.72	12.25	19.35	14.44	-23.33	N/A	N/A
Claymore/S&P Global Dividend Opp	LVL	World Stock	holdings		$13.07	6.61	13.55	19.39	45.59	-13.91	N/A	N/A
Market Vectors Brazil Small-Cap ETF	BRF	Diversified Emerging Markets	holdings		$37.27	6.42	19.80	46.16	N/A	N/A	N/A	N/A
Ultra Russell2000 Value ProShares	UVT	Small Company	holdings		$19.82	6.39	29.88	46.27	10.72	-51.27	N/A	N/A
Direxion Daily Dev Mkts Bull 3X Shrs	DZK	Foreign Stock	holdings		$74.80	6.34	28.21	55.50	30.11	N/A	N/A	N/A
Rydex 2x Russell 2000	RRY	Small Company	holdings		$29.22	6.18	21.85	43.54	22.68	-50.33	N/A	N/A
Direxion Daily Mid Cap Bull 3X Shares	MWJ	Growth			$85.31	6.15	33.07	63.84	N/A	N/A	N/A	N/A
iShares MSCI Sweden Index	EWD	Europe Stock	holdings		$23.41	6.12	16.70	25.68	54.03	-0.71	0.55	10.26
United States Oil	USO	Specialty - Natural Resources	holdings		$38.23	6.11	9.42	14.53	15.50	-61.07	-17.23	N/A
Ultra Oil & Gas ProShares	DIG	Specialty - Natural Resources	holdings		$30.28	6.10	7.83	12.72	5.53	-65.81	N/A	N/A
Direxion Daily Large Cap Bull 3X Shares	BGU	Growth	holdings		$46.67	6.07	24.16	51.04	29.15	N/A	N/A	N/A
Ultra Russell2000 ProShares	UWM	Small Company	holdings		$24.81	6.03	21.98	42.91	24.99	-51.33	N/A	N/A
PowerShares Autonomic Bal NFA Glbl Asset	PCA	Balanced	holdings		$11.69	5.98	8.67	14.11	13.08	-11.37	N/A	N/A
Rydex 2x S&P Select Sector Health Care	RHM	Specialty - Health	holdings		$56.29	5.97	13.35	25.89	17.74	-31.83	N/A	N/A

Disclosure: We may own any EFT above at any time.

Please verify the performance of any ETF before investing,

China is Spending Excess Dollar$

Trend: China is buying assets – commodities, land, mines, corporations, rare earths, and gold – with the excess dollars it has accumulated from exporting goods to the US.

Richard Russell describes why China is on a buying spree: to get rid of the excess dollars being devalued by the Fed policy of money creation. China is using these dollars to purchase tangible assets that will grow in value as the dollar declines.

I'll be following the China strategy. This is a potentially huge trend.

Excerpts from Richard Russell's comments are below.

Link: Richard Russell, Dow Theory Letters, 8/19/2009

The battle to save economies goes on. The feared enemy is deflation. How do you conquer deflation? Deflation, by definition, represents an insufficient amount of money dealing with too great a supply of goods. So the Bernanke solution is tried -- create trillions in new money. Urge consumers to buy, buy, buy. And bury deflation in a rising tide of fiat money.

But wait -- there's a problem. When you create all this new money you are also creating mountains of debt. How do you pay off this debt? You can renege on it (unthinkable) or you can refinance it (push the pay-off out to as many years into the future as possible) or you can systematically inflate it away. The easiest and time-tested way -- inflate it away.

At some point, so much fiat 'junk' money is created that people no longer trust it. That's the situation China is in now, with its $1.7 trillion hoard of US dollar-denominated securities. So what does China do? It decides to swap its US dollars for anything intrinsic. And that means that China is buying commodities, land, mines, corporations, rare earths, gold, anything of intrinsic value with fiat money that it earned from the US. China is very smart. It doesn't just dump its US securities, which would wreck the market. Instead, it uses its dollars to buy something of intrinsic value. In this way, China solves two problems. It gets rid of dollars, and it buys assets at bargain prices. Assets that it knows it will need in the future.

Maybe you and I should be doing the same thing.

Precious Metals Gain Favor

Trend: The creation of money by governments is stimulating interest in owning precious metals as a safeguard for future purchasing power.

Currency creation (quantitative easing) usually decreases the value of the currency. Much currency is being created by central banks throughout the world to counter deflationary trends.

Link: Thoughts from the Frontline - The Great Reflation Experiment.

...the dollar must fall over time. Investors need to diversify away from this risk. There are three obvious ways.

The first is investing in high-quality US equities that have a majority of their earnings and assets in hard-currency countries.

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The second is investing in gold and related assets. Gold will probably remain in a tug of war for some time. On the negative side, it is faced with nonexistent global price inflation, even deflation, and a sharp decline in jewelry demand. On the positive side, concerns over U. monetary and fiscal debauchery will almost certainly heat up. As the odds of the latter increase, gold will be a major beneficiary, and investors should have a healthy insurance position in this asset class.

Best Performing ETFs for the Past Week

Trend: Direxion Daily Real Estate Bull 3X Shrs (DRN) led the one week performance (+11%). B2B Internet HOLDRs (BHH) and Direxion Daily 30 Yr Trs Bull 3X Shares (TMF) were the second and third best performers, respectively.

The 20 ETFs with the best one week performance through 8/14/2009 tracked by Morningstar are shown below.

Source: MSN Money Exchange Traded Funds (ETFs) Performance Tracker

Name	Ticker	Category	Holdings	Morningstar	Last Price*	1-Wk	4-Wks	13-Wks	YTD	52-Wks	3-Yrs	5-Yrs
Direxion Daily Real Estate Bull 3X Shrs	DRN	Specialty - Real Estate			$104.84	11.19	N/A	N/A	N/A	N/A	N/A	N/A
B2B Internet HOLDRs	BHH	Specialty - Technology	holdings		$0.40	11.11	25.00	7.27	73.91	-41.18	-1.08	-0.75
Direxion Daily 30 Yr Trs Bull 3X Shares	TMF	Government Bond - Treasury			$39.57	10.78	-2.87	-18.22	N/A	N/A	N/A	N/A
Direxion Daily Small Cap Bull 3X Shares	TNA	Small Company	holdings		$37.16	10.00	58.33	72.26	16.79	N/A	N/A	N/A
PowerShares DB Crude Oil Dble Short ETN	DTO	Specialty - Natural Resources			$81.59	9.27	-16.19	-36.38	-44.13	146.87	N/A	N/A
MacroShares Major Metro Housing Down	DMM	Specialty - Real Estate			$27.50	7.63	-23.56	N/A	N/A	N/A	N/A	N/A
Direxion Daily 10 Yr Trs Bull 3X Shares	TYD	Government Bond - Treasury			$49.12	7.60	-2.81	-10.20	N/A	N/A	N/A	N/A
ELEMENTS BG Small Cap ETN	BSC	Small Company			$9.86	7.22	27.77	26.62	52.46	-2.72	N/A	N/A
Vanguard Extended Dur Treas Idx Instl	EDV	Government Bond - Treasury	holdings		$98.08	6.32	-0.05	-4.28	-31.38	6.83	N/A	N/A
Direxion Daily Emrg Mkts Bear 3X Shares	EDZ	Diversified Emerging Markets	holdings		$9.49	5.80	-35.84	-49.57	-85.89	N/A	N/A	N/A
iPath DJ AIG Cotton TR Sub-Idx ETN	BAL	Specialty - Natural Resources			$31.53	5.79	2.95	0.33	15.61	-24.45	N/A	N/A
Ultra Consumer Services ProShares	UCC	Specialty - Unaligned	holdings		$26.01	5.77	31.21	29.77	31.38	-37.50	N/A	N/A
iPath DJ AIG Sugar TR Sub-Idx ETN	SGG	Specialty - Natural Resources			$66.29	5.59	24.02	31.87	63.36	25.57	N/A	N/A
Ultra Yen ProShares	YCL	Worldwide Bond			$25.38	5.44	-3.53	0.75	-11.46	N/A	N/A	N/A
ELEMENTS BG Total Market ETN	BVT	Growth			$8.86	5.31	23.41	25.39	63.55	-7.98	N/A	N/A
PowerShares DB Commodity Dble Short ETN	DEE	Specialty - Natural Resources			$63.10	4.90	-13.15	-11.58	-14.44	142.88	N/A	N/A
Market Vectors Coal ETF	KOL	Specialty - Natural Resources	holdings		$29.00	4.88	36.35	42.51	99.26	-29.32	N/A	N/A
Ultra Basic Materials ProShares	UYM	Specialty - Natural Resources	holdings		$24.23	4.85	57.63	56.55	77.48	-66.42	N/A	N/A
UltraShort MSCI Brazil ProShares	BZQ	Growth	holdings		$44.01	4.79	-30.58	N/A	N/A	N/A	N/A	N/A
iShares FTSE EPRA/NAREIT Dev EU Idx	IFEU	Specialty - Real Estate	holdings		$28.10	4.58	28.78	34.37	26.69	-25.27	N/A	N/A

Disclosure: We may own any EFT above at any time.

Please verify the performance of any ETF before investing

This Market Rally Lacks One Key Ingredient

Trend: The stock market has rallied in the summer of 2009 with weak volume.

Market upswings on low volume are abnormal. Much of the volume in the current market is program trading, especially in the leveraged ETFs.

As Shah Gilani at Money Morning emphasizes in The Hidden Risks of ETFs, the volume that we see now can be misleading – it's not the kind of volume we saw in the good old days.

When the shares of an ETF trade, for any number of reasons, at a discount or premium to their net asset value, or NAV, the “authorized participants” rush in to “arbitrage” the difference. Buying or selling shares, and swapping them out on the other side to the ETF sponsors, theoretically drives the ETF price closer to NAV. There are billions of dollars to be made – chiefly by insiders, or those connected to insiders – in this exercise, which is why it’s become a business in and of itself. The more ETFs there are, the more locked-in arbitrage opportunities there are for the insiders. It’s brilliant. The problem, not just because I didn’t think of it, is that it skews trading-volume figures, creating a false sense of liquidity – and with that a false sense of safety.

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Credit Suisse Group AG (NYSE ADR: CS) now estimates that ETFs account for a quarter of U.S. equity volume.

But now that you understand how this works, here are three obvious – and somewhat scary – questions to ask:

• How much then of the volume we presume to be available on a daily basis in our markets actually consists of ETF-related arbitrage-transaction volume, meaning it isn’t actually providing greater liquidity?
• And does that mean that our financial markets are actually in much worse shape than we realize?
• And, lastly, are the ETFs that retail investors employ to be safer than individual stocks in reality much-riskier instruments?

Charles Hugh Smith at the Of Two Minds blog is suspicious about the current rally. He feels that the market is being pumped up to create the illusion of "back to normal". Excerpts below.

I find his reasoning plausible. Powerful institutions (Wall Street, the Fed, the President, the Main Stream Media) want individual investors to believe that the recession is over and it's safe to invest and spend again. Be very careful out there!

Link: of two minds: A Wild Speculation: the Stock Market and the Economy.

The U.S. economy is at a cross-roads. Either it is exiting the recession and about to resume its glorious path of "growth" or it is teetering on the abyss.

If you were the Powers That Be--those holding the reins of political power and those making hundreds of millions in Wall Street bonuses--which alternative would you prefer? Which one would you throw your weight behind?

Now here's the first thing we have to understand: borrowing $200 billion at zero-interest and dumping it into the $12 trillion U.S. economy is akin to spitting in the wind. The Bush-era "stimulus" of around that size just vanished sight unseen, barely registering in the economy at all.

But $200 billion dumped into stock market futures and churned in program trading and high-frequency trading has enormous leverage. While the total value of the U.S. stock market is in the $10 trillion range (down from $15 trillion at its 2007 height), only a few percent of the total outstanding shares trade hands each day.

Best Performing ETFs for the Past Week

Trend: Ultra Real Estate ProShares (URE) led the one week performance (+34%). Direxion Daily Financial Bull 3X Shares (FAS) and Rydex 2x S&P Select Sector Financial (RFL) were the second and third best performers, respectively.

The 20 ETFs with the best one week performance through 8/7/2009 tracked by Morningstar are shown below.

Source: MSN Money Exchange Traded Funds (ETFs) Performance Tracker

Name	Ticker	Category	Holdings	Morningstar	Last Price*	1-Wk	4-Wks	13-Wks	YTD	52-Wks	3-Yrs	5-Yrs
Ultra Real Estate ProShares	URE	Specialty - Real Estate	holdings		$5.74	34.11	79.94	59.33	-7.35	-78.63	N/A	N/A
Direxion Daily Financial Bull 3X Shares	FAS	Specialty - Financial	holdings		$76.09	32.17	92.87	46.08	-40.01	N/A	N/A	N/A
Rydex 2x S&P Select Sector Financial	RFL	Specialty - Financial	holdings		$12.76	21.78	60.71	33.83	-10.28	-78.43	N/A	N/A
iShares Cohen & Steers Realty Majors	ICF	Specialty - Real Estate	holdings		$46.77	17.84	37.80	30.16	9.79	-35.07	-15.04	0.84
iShares Cohen & Steers Realty Majors	ICF	Specialty - Real Estate	holdings		$46.77	17.84	37.80	30.16	9.79	-35.07	-15.04	0.84
iShares Cohen & Steers Realty Majors	ICF	Specialty - Real Estate	holdings		$46.77	17.84	37.80	30.16	9.79	-35.07	-15.04	0.84
SPDR Dow Jones REIT	RWR	Specialty - Real Estate	holdings		$43.92	17.09	36.91	30.73	12.23	-30.87	-13.77	1.47
iShares FTSE NAREIT Retail Cp Idx	RTL	Specialty - Real Estate	holdings		$19.52	16.84	34.29	27.01	14.53	-38.10	N/A	N/A
Vanguard REIT Index	VNQ	Specialty - Real Estate	holdings		$40.12	16.80	36.28	30.18	13.99	-28.25	-12.37	N/A
Ultra Financials ProShares	UYG	Specialty - Financial	holdings		$5.55	16.19	43.17	19.12	-12.20	-76.93	N/A	N/A
iShares FTSE EPRA/NAREIT North America	IFNA	Specialty - Real Estate	holdings		$29.23	15.99	36.52	30.18	18.76	-28.56	N/A	N/A
First Trust S&P REIT	FRI	Specialty - Real Estate	holdings		$10.40	15.89	35.25	31.42	12.82	-32.33	N/A	N/A
iShares Dow Jones US Real Estate	IYR	Specialty - Real Estate	holdings		$41.44	15.59	34.90	28.95	15.45	-28.41	-13.38	0.55
iShares FTSE NAREIT Real Estate 50	FTY	Specialty - Real Estate	holdings		$24.95	15.30	34.72	29.88	11.75	-28.33	N/A	N/A
iShares FTSE NAREIT Resid Plus Cp Idx	REZ	Specialty - Real Estate	holdings		$27.94	15.26	32.86	32.73	6.93	-29.03	N/A	N/A
Direxion Daily 30 Yr Trs Bear 3X Shares	TMV	Government Bond - Treasury			$84.32	15.14	10.87	3.94	N/A	N/A	N/A	N/A
PowerShares DB Base Metals Dble Long ETN	BDD	Specialty - Natural Resources			$12.02	13.29	47.30	53.51	123.42	-46.22	N/A	N/A
PowerShares Active U.S. Real Estate	PSR	Specialty - Real Estate	holdings		$33.59	12.62	28.83	18.62	10.52	N/A	N/A	N/A
iShares FTSE NAREIT Industrl/Offc Cp Idx	FIO	Specialty - Real Estate	holdings		$21.34	12.58	30.26	19.55	9.45	-43.64	N/A	N/A
Ultra Basic Materials ProShares	UYM	Specialty - Natural Resources	holdings		$24.48	12.49	50.81	27.24	69.27	-67.43	N/A	N/A

Disclosure: We may own any EFT above at any time.

Please verify the performance of any ETF before investing

Seven Misconceptions About Leveraged ETFs

Trend: Some financial institutions are banning the purchase of leveraged ETFs.

ETFDB.com describes some of the possibly misleading information about leveraged ETFs being publicized by detractors (like Jim Cramer). Excerpts below.

Link: Why Everything You’ve Heard About Leveraged ETFs Is Wrong | ETF Database.

There has been a great deal written about leveraged ETFs, almost all of which has focused on drawbacks and limitations and much of which has been misleading or just plain wrong. Here’s a look at seven of the biggest misconceptions about leveraged ETFs, as well as an explanation of the truth behind these oft-maligned funds.

1. Leveraged ETFs don’t perform as they’re supposed to. This is perhaps the biggest and most frustrating misconception about leveraged ETFs. Leveraged ETFs, for the most part, perform exactly as they are supposed to. The key here is to examine performance on a daily basis. Earlier this year I looked at the performance of several ProShares 200% ETFs, including the Ultra Russell 2000 (UWM) and UltraShort Russell 2000 (TWM). Nine days out of ten, these funds had returns within 50 basis points of their target daily objective, a stellar performance considering the use of significant leverage in these funds.

2. Leveraged ETFs can only be understood by sophisticated investors. Although leveraged ETFs use complex financial instruments, such as swaps and futures, they’re actually not that difficult to understand. Consider the following (admittedly simplified) example of a 3x leveraged ETF with $100 million in assets:

Best Performing ETFs for the Past Week

Trend: Direxion Daily 30 Yr Trs Bull 3X Shares (TMF) led the one week performance (+13%). ELEMENTS MLCX Biofuels Index TR ETN (FUE) and Direxion Daily Financial Bull 3X Shares (FAS) were the second and third best performers, respectively.

The 20 ETFs with the best one week performance through 7/31/2009 tracked by Morningstar are shown below.

Source: MSN Money Exchange Traded Funds (ETFs) Performance Tracker

Name	Ticker	Category	Holdings	Morningstar	Last Price*	1-Wk	4-Wks	13-Wks	YTD	52-Wks	3-Yrs	5-Yrs
Direxion Daily 30 Yr Trs Bull 3X Shares	TMF	Government Bond - Treasury			$41.64	12.60	0.30	-14.20	N/A	N/A	N/A	N/A
ELEMENTS MLCX Biofuels Index TR ETN	FUE	Specialty - Natural Resources			$7.60	11.93	-5.36	4.82	11.93	-26.36	N/A	N/A
Direxion Daily Financial Bull 3X Shares	FAS	Specialty - Financial	holdings		$57.57	11.81	24.58	41.80	-54.61	N/A	N/A	N/A
SPDR KBW Regional Banking	KRE	Specialty - Financial	holdings		$20.82	10.10	12.98	-0.52	-28.20	-29.82	-22.09	N/A
PowerShares DB Agriculture Dble Long ETN	DAG	Specialty - Natural Resources			$9.39	9.06	1.08	-0.32	-7.67	-56.14	N/A	N/A
Rydex 2x S&P Select Sector Financial	RFL	Specialty - Financial	holdings		$10.48	8.58	16.68	37.19	-26.33	-82.93	N/A	N/A
SPDR KBW Bank	KBE	Specialty - Financial	holdings		$20.10	8.53	11.36	23.92	-7.17	-36.17	-25.68	N/A
iShares FTSE EPRA/NAREIT North America	IFNA	Specialty - Real Estate	holdings		$25.20	8.25	10.53	10.96	2.39	-39.29	N/A	N/A
Direxion Daily Dev Mkts Bull 3X Shrs	DZK	Foreign Stock	holdings		$67.81	8.10	32.23	72.41	17.95	N/A	N/A	N/A
Market Vectors Indonesia ETF	IDX	Diversified Emerging Markets	holdings		$53.61	7.89	22.26	53.00	N/A	N/A	N/A	N/A
SPDR KBW Mortgage Finance	KME	Specialty - Financial			$40.00	7.47	10.47	-0.45	N/A	N/A	N/A	N/A
PowerShares DB Base Metals Dble Long ETN	BDD	Specialty - Natural Resources			$10.61	7.39	29.98	52.66	97.21	-56.61	N/A	N/A
Direxion Daily Small Cap Bull 3X Shares	TNA	Small Company	holdings		$35.75	7.19	29.92	41.64	6.11	N/A	N/A	N/A
iShares Dow Jones US Regional Banks	IAT	Specialty - Financial	holdings		$19.02	7.15	9.25	7.15	-19.26	-33.31	-24.59	N/A
iShares MSCI Turkey Invest Mkt Index	TUR	Diversified Emerging Markets	holdings		$45.01	6.94	19.18	49.82	67.99	-18.15	N/A	N/A
iPath DJ AIG Grains TR Sub-Idx ETN	JJG	Specialty - Natural Resources			$39.02	6.90	-0.96	-4.06	-6.34	-37.16	N/A	N/A
WisdomTree Pacific ex-Japan Equity Inc	DNH	Pacific Stock	holdings		$45.40	6.80	15.02	34.57	41.31	-12.51	3.05	N/A
Ultra Real Estate ProShares	URE	Specialty - Real Estate	holdings		$4.28	6.73	20.22	12.89	-30.91	-84.07	N/A	N/A
ELEMENTS DJ High Yield Select 10 ETN	DOD	Growth			$6.21	6.70	11.89	18.29	9.72	-21.59	N/A	N/A
PowerShares Lux Nanotech	PXN	Specialty - Technology	holdings		$10.04	6.47	16.20	31.02	32.22	-27.97	-15.39	N/A

Disclosure: We may own any EFT above at any time.

Please verify the performance of any ETF before investing