On Monday, we took a look at the ten ETF’s that had the best returns so far in 2009 and what could be drawn from such results. It is probably as important to look at those who did poorly and in this column, we take a look at the 10 ETF’s that have the worst returns so far this year. You would certainly expect to have a few leveraged ETF’s in here. It’s no secret that owning a 2 or 3 times bear ETF on something that keeps going up will turn into a disaster.

Worst ETF’s so far in 2009 as per their return

And yes, as expected, leveraged ETF’s are a big part of these worst performers. Poor Direxion has the 3 top ETF’s in this category but you would probably expect that when you offer ETF’s with 3X the exposure.  What I am surprised about is that for the best performers, a few picks were not leveraged ETF’s but all 10 ETF’s listed here are leveraged. Lessons? Again, I would argue that unless you are truly going for a homerun, I would not use a leveraged ETF for long term investing (the key here being the point that I consider 1 year to be long term).

Here is the chart for the past few months for FAZ:

Of course, with the complete collapse that financials suffered in 2008, it was doubtful that being short financials would be the trade of the year wasn’t it? I would say that generally, picking the same trade that was a winner in the past year will rarely be the result. So do not expect me to pick GLD, BIDU, EBAY or USO for my picks next week.

The other non surprising result is that leveraged ETF’s that were emerging market bears did not do well. An economic recovery is obviously very good news for emerging markets as they have a strong beta (they usually go up and down more than the developed markets).

Seeing these results also helps me confirm that I will not be picking any 3x leveraged ETF’s. I am not 100% decided on 2x ETF’s but I would say that I will probably stay far from those as well.

The next year is only days away now and while many of us are thinking about Christmas, holidays and others. It is also time to start looking at what will be the better investments for next year. Over the next few weeks I will be writing about possible winners for 2010 as well as announcing results for the stock picking competition that I was part of (was leading after Q3), making my 4 new picks for 2010 and many others. So no holidays for me!

I think one of the best ways to get ideas about the best ETF’s for 2010 is to look at what has worked so far in 2009, so here are the top performing 2009 ETF’s as of Friday’s close in the US in case you are not finding a retail franchise opportunity!!!

Top ETF’s so far in 2009 as per their return

Surprised? I guess it’s not a huge surprise to have a few leveraged ETF’s at the top. They offer so much possibilities that if you pick the right one, you are sure to make a good return. Of course, there are many risks involved in leveraged ETF’s and I am far from certain that I will be picking a leveraged ETF in my picks for 2010! I have always liked leveraged ETF’s as trading investments, not as long term investments. Does one year count as long term?? I guess that depends on each investor.

So here is the chart from TYH, a 3x leverage on technology stocks in the past few months:

If I had been asked to guess what the best non leveraged ETF had been, I would have never guessed that it was RSX, an ETF that tracks the Russian stock market. It is also quite interesting because Goldman Sachs has actually said that being long Russia is one of their top trade recommendations for 2010!

Commodities like Oil and Natural Gas???

We (I’ll take the blame as well) tend to discuss Oil, Natural Gas and Gold when discussing commodities and it is no surprise to see that a few of the top returning ETF’s in 2009 have been commodities. But not the ones we always hear about. Rather, ETF’s on coal (KOL, PKOL), lead(LD) and Copper (JJC) have been solid enough to make the top 10 list!!

It is certainly interesting to see that despite all of the talk about clean energy and cap and trade, the top returns still origin from the “dirty energy” and older resources. This trend might influence my picks for 2010 as there are no doubt resources that will perform better than the usual picks on oil and natural gas.

Among those top 10 ETF’s, which would you think will perform best in 2010????

Today was a very interesting day for the mbile makers as what many consider to be the two big Apple(AAPL) rivals announced results a few minutes ago. A few years ago, the cell phone makers were led by companies like Ericsson, Nokia. But nowadays, it is all about smartphone and while Apple is new in the field, it has already set both Research in Motion and Palm on the defensive. And now that Google has its own phone & software (Android), things will heat up for all 3 of these players in the smartphone field.

Remember how internet companies (especially before the dot com bust) were judged more on their visitors than actual revenues/profits? It seems like both of these companies will have to go through similar judgments. Of course, in their case, the big number is the amount of subscribers/users (RIMM added 4.4 millions subscribers).

For Palm, let’s face it, expectations are quite low as estimates were for a loss of $0.33/share so there will be a lot more weight about their own forecasts for 2010. Do they still expect to be able to turn things around thanks to their newly launched Palm Pre? I’m personally very skeptical about anyone who is battling with RIMM and Apple.

For Research in Motion, it is quite a different situation. While it is having trouble gaining market share and is in many regards behind Apple’s Iphone, the truth is that among business consumers, it remains by far the $1 choice nad it seems unlikely to lose that title anytime soon.

So let’s get down to the numbers…!

RIMM Estimated Earnings Per share: 1,04$
RIMM Result: 1,10$

PALM Estimated loss per share:  .33$
PALM Result: -.37$

Congrats RIMM… more to come:)