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TheStreet Open House

TheStreet.com Initiates Ratings on 24 ETFs

TheStreet.com Ratings initiated coverage of one closed-end fund and 24 exchange-traded funds that accrued a sufficient track record of risk and performance data by the end of November.

Only one of the funds that began trading in November 2007 received our top rating level of Excellent. The PowerShares VRDO Tax-Free Weekly Portfolio (PVI) rating of A+ characterizes the small but steady gains of its municipal bond securities.

The six exchange-traded funds with extraordinary one-year returns picked the right year to be short the market with as much as 200% negative leverage to their slice of world equities. These performances were balanced out with equally extraordinary volatility, landing them back in the middle of the risk-adjusted return rankings for hold ratings in the C+ to C- range.

The biggest gains were 38.45% in ProShares Short MSCI Emerging Markets (EUM), 85.08% in Rydex Inverse 2x S&P MidCap 400 ETF (RMS), 84.28% in Rydex Inverse 2x S&P 500 ETF (RSW), 64.27% in Rydex Inverse 2x Russell 2000 ETF (RRZ) and 47.32% in ProShares UltraShort MSCI Japan (EWV).

This month there was also one closed-end fund, Nuveen Municipal High Income Opportunity Fund 2 (NMD) accumulating a sufficient track record to receive an initial rating of D- after losing 35.97% in a year.

Research Methodology

TheStreet.com Ratings condenses the available fund performance and risk data into a single composite opinion of each fund's risk-adjusted performance. This allows the unbiased identification of those funds that have historically done well and those that have underperformed the market. While there is no guarantee of future performance, these Investment Ratings provide a solid framework for making informed, timely investment decisions. The funds listed below have reached their one year anniversary.

Newly Rated Exchange-Traded Funds
Fund (Ticker)  Initial Rating
Objective
Total Return 3 Months
Total Return 1 Year
PowerShares VRDO Tax-Free Weekly (PVI)  A+
Municipal - High Yield
1.20%
3.57%
ProShares Sht MSCI Emg Mkts (EUM)  C+
Emerging Market Equity
17.18%
38.45%
Rydex Inverse 2x S&P MidCap 400 ETF (RMS)  C
Equity Income
78.17%
85.08%
Rydex Inverse 2x S&P 500 ETF (RSW)  C
Equity Income
49.13%
84.28%
Rydex Inverse 2x Russell 2000 ETF (RRZ)  C
Equity Income
71.70%
64.27%
ProShares UltraShort MSCI Japan (EWV)  C
Non-US Equity
9.75%
47.32%
ProShares UltSht MSCI Emg Mkts (EEV)  C-
Emerging Market Equity
-18.49%
4.05%
SPDR Lehman High Yield Bond ETF (JNK)  D-
Corporate - High Yield
-31.41%
-35.04%
PowerShares High Yield Corp Bond (PHB)  D-
Corporate - High Yield
-34.65%
-39.27%
ELEMENTS SPE Lg Cap U.S Sec Mom (DOD)  D-
Sector - Energy/Natural Res
-26.43%
-41.53%
First Trust DJ Glb Sel Div Idx Fd (FGD)  D-
Global Equity
-41.11%
-55.22%
ProShares UltSht FTSE/Xinhua Ch 25 (FXP)  E+
Non-US Equity
-38.05%
-26.43%
iShares MSCI Chile Inv Mk Idx (ECH)  E+
Non-US Equity
-33.76%
-39.54%
iShares S&P Asia 50 Index Fund (AIA)  E+
Non-US Equity
-38.43%
-51.97%
iShares FTSE Dev Sm Cap ex-North (IFSM)  E+
Non-US Equity
-41.76%
-53.38%
Rydex 2x S&P 500 ETF (RSU)  E+
Equity Income
-56.73%
-68.33%
iShares FTSE EPRA/NAREIT NA Idx (IFNA)  E
Growth & Income
-49.23%
-51.11%
iShares FTSE EPRA/NAREIT Europe Ind (IFEU)  E
Non-US Equity
-46.29%
-56.65%
iShares FTSE EPRA/NAREIT Glb Real (IFGL)  E
Global Equity
-40.45%
-56.97%
iShares FTSE EPRA/NAREIT Asia Index (IFAS)  E
Non-US Equity
-37.09%
-57.22%
Rydex 2x Russell 2000 ETF (RRY)  E
Equity Income
-63.92%
-68.37%
Claymore/Clear Global Timber Idx (CUT)  E-
Global Equity
-41.64%
-55.77%
iShares MSCI BRIC Index Fund (BKF)  E-
Non-US Equity
-46.83%
-60.27%
Rydex 2x S&P MidCap 400 ETF (RMM)  E-
Equity Income
-66.02%
-71.08%
Source: Source: TheStreet.com Ratings

Funds rated A or B are considered "Buy" rated based on a track record of higher than average risk-adjusted performance. Funds at the C level are rated as "Hold," while underperformers at the D and E levels our model ranks as "Sell."

For more information, check out an explanation of our ratings.

Kevin Baker became the senior financial analyst for TSC Ratings upon the August 2006 acquisition of Weiss Ratings by TheStreet.com, covering mutual funds. He joined the Weiss Group in 1997 as a banking and brokerage analyst. In 1999, he created the Weiss Group's first ratings to gauge the level of risk in U.S. equities. Baker received a B.S. degree in management from Rensselaer Polytechnic Institute and an M.B.A. with a finance specialization from Nova Southeastern University.

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