The Top-Rated ETFs of August

The list of best-rated exchange-traded funds in August signals caution and reflects the flight to quality sought by many investors. Six of the 10 best-rated ETFs are fixed-income funds.

In a shift to more conservative portfolios in August, bonds rallied while their yields dipped. Government bond funds of various targeted maturities outranked other ETFs.

The long-term bonds did the best with the iShares Lehman 10-20 Year Treasury Bond Fund (TLH Quote - Cramer on TLH - Stock Picks), earning the highest possible rating of A-plus. This was followed closely by the iShares Lehman 3-7 Year Treasury Bond Fund (IEI Quote - Cramer on IEI - Stock Picks) in second place.

The two equity funds to make the cut focus on industries with some protection from recession. The ever inflating cost of health care boosted the fortunes of the HealthShares Enabling Technologies ETF (HHV Quote - Cramer on HHV - Stock Picks).

Also, there are some products in the categories of food, beverages and hygiene that are considered the basic necessities of life. These are sold by the companies in the Consumer Staples Select Sector SPDR Fund (XLP Quote - Cramer on XLP - Stock Picks), with the biggest concentrations being in Procter & Gamble (PG Quote - Cramer on PG - Stock Picks), Wal-Mart Stores (WMT Quote - Cramer on WMT - Stock Picks), Philip Morris (PM Quote - Cramer on PM - Stock Picks), Coca-Cola (KO Quote - Cramer on KO - Stock Picks), CVS/Caremark (CVS Quote - Cramer on CVS - Stock Picks), PepsiCo (PEP Quote - Cramer on PEP - Stock Picks), Anheuser-Busch (BUD Quote - Cramer on BUD - Stock Picks) and the newest member of the Dow Jones Industrial Average, Kraft Foods (KFT Quote - Cramer on KFT - Stock Picks).

Ironically, both a bullish and bearish play on the U.S. dollar are listed below. The PowerShares DB US Dollar Index Bullish Fund (UUP Quote - Cramer on UUP - Stock Picks) did well in August, while the CurrencyShares Mexican Peso Trust (FXM Quote - Cramer on FXM - Stock Picks) has done well over the past year.

Ten Best Rated Exchange-Traded Funds
Fund (Ticker) Rating	Total Return 1 Year	Objective
iShares Lehman 10-20 Yr Treasury Bd (TLH) A+	10.07%	Government Bond
iShares Lehman 3-7 Year Treasury Bd (IEI) A+	9.29%	Government Bond
Consumer Staples Select Sector SPDR (XLP) A+	6.75%	Growth - Domestic
SPDR Lehman Intermediate Tr Treas (ITE) A+	7.42%	Government Bond
CurrencyShares Mexican Peso Trust (FXM) A+	14.37%	Sector - Currency
PowerShares DB US Dollar Bullish Fd (UUP) A+	-2.63%	Sector - Currency
HealthShares Enabling Technologies (HHV) A+	19.78%	Sector - Health/Biotechnology
iShares Lehman MBS Fixed-Rate Bond (MBB) A+	5.86%	General Mortgage
iShares Lehman Govt/Credit Bond (GBF) A+	6.38%	Government Bond
Vanguard Intermediate Term Bond ETF (BIV) A+	5.91%	General Bd - Investment Grade
Source: TheStreet.com Ratings and Bloomberg

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