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The Chicago Board Options Exchange Volatility Index spiked to a new high on Thursday of 81.17. The rise in the VIX -- which serves as a benchmark measure of the implied volatility of S&P 500 options -- signals not just extreme bearishness but also massive uncertainty in the market.
In this environment, TheStreet.com Ratings' top 10 rated exchange-traded funds steer investors toward the relative safety of the bond market and favor inverse stock funds. All these funds are rated A+, and each of the returns cited below reflect the one-year period ending Sept. 30.
Top 10 Rated ETFs
1. The iShares Lehman 3-7 Year Treasury Bond Fund (IEI) returned 9.86% for the year. The fund tracks the Lehman Brothers 3-7 Year U.S. Treasury Index of intermediate term U.S. government bonds.2. The iShares Lehman 1-3 Year Treasury Bond Fund (SHY) earned 6.40% for the one-year period linked to the corresponding Lehman 1-3 Year Treasury Index. 3. With higher risk and return, the iShares Lehman 10-20 Year Treasury Bond Fund (TLH) showed more volatility than the above funds in its tracking of the Lehman 10-20 Year Treasury Index but beat them both with a return of 10.29%. 4. SPDR Lehman Intermediate Term Treasury ETF (ITE) comes in fourth place, returning 8.24%. It gauges the movements of price and accumulated yield of the Lehman Intermediate US Treasury Index. 5. iShares Lehman MBS Fixed-Rate Bond Fund (MBB) made the list with a 6.55% return, holding the same types of mortgage-backed securities from Fannie Mae (FNM) and Freddie Mac (FRE) that have been at the center of the financial storm.
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