Short ETFs Got Soaked in April
If there was one thing better than being short the stock market early this year, it was being short and leveraged. But then the market's spirited rebound in April again proved that leverage -- especially on the short side of the market -- could be a deadly two-way street.
As can be seen in the lower portion of the accompanying table of the biggest exchange-traded fund ratings grade upgrades and downgrades, short and leveraged has not been recommended territory of late.
Four of the five biggest ETF downgrades happened to ProShares "Ultra Short" inverse-leveraged funds. In fact, 13 of the 15 biggest recent downgrades in ETFs by TheStreet.com Ratings were for ProShares "Short" or "Ultra Short" funds.
On the top list of the highest ratings upgrades, the surging price of crude oil lifted the WisdomTree International Energy ETF (DKA) from a C+ grade in the "hold" range to the highest possible mark of A+, which elevated it to a "buy" recommendation.
|BIGGEST EXCHANGE TRADED FUND RATINGS GRADE CHANGES|
|NAME, TICKER & TheStreet.com RATINGS CURRENT GRADE||PREV. GRADE||RECOMMENDATION CHANGE||YR. TO DATE TOTAL RET'N (%)||12-MO. TOTAL RET'N (%)||TOTAL EXPENSE RATION (%)|
|WisdomTree International Energy (DKA) A+||C+||Hold to Buy||6.49||24.99||0.58|
|HOLDRS B2B Internet (BHH) C-||E-||Sell to Hold||14.29||33.70||0.00|
|Rydex S&P Equal Weight Ind ETF (RGI) A-||C||Hold to Buy||-0.40||4.47||0.50|
|PowerShares Water Resources (PHO) C+||D-||Sell to Hold||-2.81||7.20||0.66|
|First Trust NASDAQ Cln Edg U.S. Liq (QCLN) D||E-||Strong Sell to Sell||-24.00||15.36||0.60|
|ProShares Ult Sht Rus Mid Cp Growth (SDK) C-||A+||Buy to Hold||6.25||5.77||0.95|
|ProShares Ultra Short QQQ (QID) E-||C+||Hold to Sell||11.88||-10.02||0.95|
|Market Vectors TR Gold Miners (GDX) D-||B+||Buy to Sell||-4.87||12.01||0.55|
|ProShares Ultra Short Semiconductor (SSG) D+||A||Buy to Sell||14.38||6.94||0.95|
|ProShares Ultra Short Industrials (SIJ) D+||A-||Buy to Sell||2.55||-4.00||0.95|
|Source: TheStreet.com Ratings - Data as of 4/30/2008.
For an explanation of our ratings, click here.
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