The health/biotechnology sector dominated half the top 10 list of the most recently improved exchange-traded funds, as measured by improvements in their grades computed by TheStreet.com Ratings.
A pair of "green" ETFs also adorn the most-improved section of the accompanying table of major grade changes. The Market Vectors Environmental Industry ETF (EVX) recently improved from a mark of C-minus from TheStreet.com Ratings' objective grading system to an A, elevating it from a "hold" to a "buy" recommendation.
Perhaps it's a sign of the times that an environmental fund and an alternative energy ETF appear in the "most improved" section while two more energy funds that focus on the more traditional petroleum side of the energy industry populate the "most deteriorated" section of the table.
The Market Vectors Global Alternative Energy ETF (GEX) climbed from an E grade, which equates to a "sell" recommendation, to a mark of C-minus.Closely related to the environmental funds are two that invest in the business of supply water. The PowerShares Water Resources ETF (PHO) moved from a D to a B-minus grade, while the First Trust ISE Water Index Fund (FIW) climbed from an E-plus to a mark of C. Of all the upgrades, the First Trust Amex Biotechnology ETF (FBT) stood out performancewise. Its double-digit gains of 15.57% and 13.45% for the most recent three months and 12 months, respectively, pulled its grade from a C-minus to an A. FBT's major portfolio holdings include Vertex Pharmaceuticals (VRTX - Get Report), Amgen (AMGN - Get Report), Genentech (DNA) and Gilead Sciences (GILD - Get Report). The perils of leverage are graphically demonstrated in the six ETFs on the list that suffered major deteriorations in grades. Five of them include "ultra" in their respective names, indicating gearing that hurts on the downside just as much as it supplies additional pleasure when prices are rising. The only nonleveraged fund on the bottom section of the table is the Wisdom Tree International Energy ETF (DKA), whose grade tumbled from an A to a C-plus. That reduced its recommendation from TheStreet.com Ratings from a "buy" to a "hold". Another energy ETF, the leveraged ProShares Ultra Oil & Gas (DIG), is also found on the lower list. DKA's major holdings include Total (TOT), Cnooc (CEO), BP (BP) and Royal Dutch Shell (RDS.A).
|LARGEST RECENT EXCHANGE TRADED FUND RATINGS GRADE CHANGES|
|NAME, TICKER TheStreet.com RATINGS CURRENT GRADE||PREV. RATINGS GRADE||NEW STATUS||PREV. STATUS||3-MO. TOTAL TER'N (%)||12-MO. TOTAL TER'N (%)|
|Market Vectors Environment Ind ETF (EVX) A||C-||Buy||Hold||4.98||8.20|
|First Trust AMEX Biotechnology (FBT) A||C-||Buy||Hold||15.57||13.45|
|ProShares Ultra Short Utilities (SDP) B-||D-||Buy||Sell||9.49||-5.45|
|HealthShares Infectious Dis (HHG) C+||E+||Hold||Sell||8.67||-3.26|
|HealthShares Cardio Devices (HHE) A-||C||Buy||Hold||6.52||5.96|
|PowerShares Water Resources (PHO) B-||D||Buy||Sell||4.28||6.70|
|iShares DJ US Medical Devices Idx (IHI) B+||C-||Buy||Hold||5.13||5.06|
|First Trust ISE Water Index Fund (FIW) C||E+||Hold||Sell||2.20||7.90|
|HealthShares Autoimmune-Inflammatio (HHA) C-||E||Hold||Sell||6.87||2.69|
|Market Vectors Global Alt Energy (GEX) C-||E||Hold||Sell||-4.75||12.53|
|ProShares Ultra Sht Rus 2000 Growth (SKK) D+||A||Sell||Buy||-5.42||-2.36|
|ProShares Ultra Short Russell 2000 (TWM) C-||A+||Hold||Buy||-3.78||1.20|
|ProShares Ult Sht Russell 2000 Val (SJH) C+||A+||Hold||Buy||0.27||8.01|
|ProShares Ultra Short Real Estate (SRS) E-||C-||Sell||Hold||7.76||-14.54|
|ProShares Ultra Oil & Gas (DIG) C||A-||Hold||Buy||-19.68||1.07|
|WisdomTree International Energy (DKA) C+||A||Hold||Buy||-8.91||3.00|
|Source: TheStreet.com Ratings - Data as of 7/31/2008.
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