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Your top picks
Here are the top five ETFs as rated by CAPS investors:

Source: Motley Fool CAPS, as of June 6, and Morningstar.

The strongest ETFs for the month were:

• Market Vectors Russia (RSX), up 17.6%
• SPDR S&P Metals & Mining (XME), up 14.9%
• United States Gasoline (UGA), up 14.6%

Click here to review the full ETF performance report.

IYM: US Basic Materials   +20%

iShares GSCI Commodity-Indexed Trust (GSG): natural resources; up 31.8% year-to-date

PHO Water Resources 22.57 0.9% 4.9% 2.7% 24.0%

1) Buy Coal.

The recent surge in coal prices is just the beginning of a longer-term cycle uptrend for coal. The global use of coal is rising while coal stockpiles are falling pushing coal prices higher.

As I suggested last week, the fastest way to invest in this price action is through the Market Vectors Coal ETFKOL, a 39-stock fund that invests in the coal industry worldwide.

2) Short Financials.

In every economic cycle downturn, major financial institutions experience significant credit losses and have a capital shortage. Earlier this week, Lehman BrothersLEH was able to raise $6 billion in equity -- but the markets are not always so kind, especially with smaller firms.

The primary ETF for shorting the U.S. financial sector is ProShares Ultra Short FinancialsSKF. (Keep in mind, the "Ultra" in the name means it's leveraged, which adds risk.)

If you think more write-offs are coming or that American International GroupAIG and other financials stocks are headed lower, this is the ETF for you.

3) Maintain Material Investments.

The best-performing holdings in the portfolio last quarter were ProShares Ultra Basic MaterialsUYM and the S&P Metals and Mining ETFXME. These were up 27% for the three-month period. This performance was driven by rising prices for steel and coal. Expect this to continue and drive materials and mining stocks higher over the coming quarters.

My favorite steel stock remains GerdauGGB, which is a top-10 holding in Market Vectors Steel ETFSLX, which did so well last quarter. In addition to being a cyclical materials beneficiary, Gerdau will benefit from last month's creation of the Union of South America Nations.

4) Explore the Oil Patch.

Three ETFs make the grade here.

The first is PowerShares Dynamic Oil & Gas Services PortfolioPXJ, which holds oil-service stocks such as McDermottMDR, HalliburtonHAL and my favorite drill-rig stock, NobleNE. The market has never looked so good for oil-service companies. The second is the S&P Oil and Gas Exploration and Production ETFXOP. The top two holdings are two shale oil stocks, PetroHawkHK and Encore AcquisitionEAC.

The third is the ProShares Oil and GasDIG, which is a concentrated play on traditional big-oil stocks.

5) Reconsider Russia.

Russia's new President Medvedev plans to turn Moscow into a global financial center and to make the ruble a leading regional reserve currency.

Fast-growing companies Gazprom and Rosneft are among the top five holdings in Market Vectors TR Russia ETFRSX. Over the last year this ETF has gained 56%, but looks to have still more upside potential with 36% of the portfolio in oil and gas, and another 26% of its investments in iron and steel products.

6) Short China in the Short-Term.

Be careful with this one.

If you are sour on emerging markets, try ProShares UltraShort FTSE/Xinhua China 25FXP. The recent natural disasters and expectations for slowing growth might make this a good time to place a short-term bet before the Olympics. Slower growth may be good longer-term for the economy but is likely to hurt stock investors expecting fast money near-term.

Things are not so rosy out East in general. The DB X-TRACKERS FTSE VIETNAM ETFXFVT dropped 30% last month, posting a 58% loss since its inception in February. Inflation fears, a currency crisis and IPO delays are scaring foreign investors from this once-buoyant market.

7) Nuclear.

As the world looks to cut its reliance on oil and coal and curb carbon dioxide emissions, some of the best-performing stocks of the next 12 to 18 months may be in the global nuclear sector.

The Market Vectors Nuclear FundNLR is a global fund that invests in the nuclear energy business. Only 29% of this fund is in U.S. stocks, with another 26% from Japan and 24% from Canada. Three leading investments represent 30% of the fund: Electricite de France, British Energy Group and Mitsubishi Heavy Industries.

The regulatory environment for nuclear power is improving. China is planning to build 30 new nuclear reactors over the next 13 years. Last month, Italy lifted a 20-year moratorium on nuclear-power stations. Even in the U.S., several state legislatures are considering bills to lift the ban on nuclear power.

The active ETFs currently available are:

• PowerShares Active Low Duration Fund (PLK)
• PowerShares Active Mega Cap Fund (PMA)
• PowerShares Active Alpha Q Fund (PQY)
• PowerShares Active Alpha Multi-Cap Fund (PQZ)
• WisdomTree Dreyfus Chinese Yuan Fund (CYB)
• WisdomTree Dreyfus Indian Rupee Fund (ICN)
• WisdomTree Dreyfus Brazilian Real Fund (BZF)
• WisdomTree Dreyfus Euro Fund (EU)
• Bear Stearns Current Yield (YYY)

GSP

E-Mini Contract Specifications [top]

*H=March, M=June, U=Sept, Z=Dec
** CME minimum performance bond margins as of 1/31/02 SUBJECT TO CHANGE

 

What is 1 point of the E-mini S&P 500 worth? [top]

$50 per point per contract

For example: if the S&P 500 Index value is at 1500 and goes up 5 points to 1505 the difference is 5 points which equals $250.

$50 x 5 = $250 profit or loss per contract.

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The value of the S&P 500 futures contract can be calculated by multiplying the futures price by $500. For example,
 if the S&P's are trading at 1089.50, the value would then be $500 X 1089.50, or $544,750.
 
 The minimum price fluctuation (tick) for the S&P's are .10, so a tick up or down is worth $25 per contract. A full
 point has 10 ticks in it, which is worth $250 per contract (.10 X $25 = $250).
 
 The E-Mini S&P 500 is on the same price scale as the regular (full) S&P 500, the difference lies in the tick and
 point values. The E-Mini S&P trades in .25 ticks and is worth $12.50 per tick; and a point is worth $50
($12.50 X 4 = $50).

As you can see the E-Mini's are one fifth the size of the full S&P 500 contract.