Five Top ETFs from Last Week - UMM, TMF, FAS, DRN, PKOL

Each week, I like to publish the past week's hottest ETFs to share some new trends and niche ETFs out there and give investors some new investing/diversification ideas. For this week, Financials picked up steam again and we saw an incredible move in the new Case-Shiller Home Price ETF that while completely disconnected from reality, earned a nice 42% move for investors savvy enough to pick the inflection point. This coincided with a rally in Treasuries, slamming the "Short Treasury ETF" play that was so prevalent early in the year.

UMM - MACROSHARES MAJOR METRO HOUSING UP - Up 42% - This is a rather unorthodox ETF that, while imperfect, acts as the most representative measure of the US housing market. Basically, since the home price numbers looked good last week, the ETF rallied, but it tends to trade at premiums/discounts to the actual index, which adds some near term uncertainty and volatility to both the long and short ETFs. UMM has been on fire for a few weeks now, up 90% since July 10.

TMF - Direxion 3X Long 30 year Treasury Up 13% - A few months back, shorting Treasuries seemed like a surefire way to capture the optimal risk-adjusted return - since Treasuries really couldn't run much higher with yields approaching zero - and some short dated maturities actually fetching negative yields. Well, that strategy has sputtered out and is reversing near term. From here, it's like volatility both ways and the easy money appears to have been made. Recall that leveraged ETFs pose risks that aren't immediately intuitive due to daily rebalancing and degradation of value over time - see this article on Leveraged ETF Risks to understand why these are only suitable for a near term trade (sometimes) and never suitable for a long term hold.

FAS - Direxion Financial Bull 3X Shares - Up 12% - You can always count on having either FAS (triple long) or FAZ (triple short) Financials on the list given the volatility in the Financial sector. Financials have fared quite well recently given strong results from some of the major investment firms. FAS is up over 50% since mid-July. While near term, the prospects for financials appear to be improving, it is evident from the recent Top 10 Best Degrees survey that Wall Street simply isn't hiring right now. So it remains to be seen as to whether the improvement continues and Wall Street can return to its prior business models, strength and clout, or whether the recent rally is simply a sigh of relief that the firms that comprise the index have simply survived.

DRN - Direxion Daily Real Estate 3x - Up 12% - Obviously the Case-Shiller numbers, looking like a possible inflection point for the majority of real estate markets, homebuilders rallied last week. This ETF has a relatively short history and is up close to 30% since launch in July.

PKOL - PowerShares Global Coal Portfolio - Up 10% - For another non-leveraged ETF, this coal-oriented ETF rallied double digits last week as well, now up 85% YTD vs. a gain of 9% for the S&P500. With oil showing some strength and other economic and political factors at play, coal is hot. It is not a straight coal commodity play, but rather, holds companies that are primarily engaged in the exploration and mining of coal, so it the best proxy for the underlying coal price.