The Best- and Worst-Rated Financial ETFs

In determining TheStreet.com Ratings' "risk" grades, the model evaluates volatility measures. In addition to standard deviation of returns, the evaluation process includes a metric known as "drawdown," which gauges a fund's most severe period of loss over a period of time.

Because all funds carry some degree of risk, none receive "risk" grades in the A range. Rarely will a fund be awarded a very high "performance" rating and, at the same time, a very high "risk" rating. A fund that has earned the highest "overall" investment ratings has attained an optimal combination of both primary components. But investors should be aware that a tradeoff always exists between risk and reward.

Best- and Worst-Rated Financial ETFs By TheStreet.com Ratings NAME TICKER Reward Grade Risk Grade Overall Grade 12-Month Total Ret'n (%) Best-Rated Financial ETFs ProShares Ultra Short Financials SKF A+ D- C 82.94 KBW Capital Markets ETF KCE C- C+ C- -60.98 iShares S&P Global Financials IXG D+ C+ C- -69.41 Vanguard Financials ETF VFH D+ C+ C- -68.14 iShares Dow Jones US Financial Sect IYF D+ C+ C- -68.56 Worst-Rated Financial ETFs First Trust Financial AlphaDEX FXO E+ D E+ -56.56 ProShares Ultra Financials UYG E- C- D- -94.47 PowerShares FTSE RAFI Financials PRFF E- C+ D -74.34 Rydex S&P Eq Weight Financial ETF RYF E- C+ D -71.65 PowerShares Financial Preferred PGF E- C+ D -70.74 Source: TheStreet.com Ratings (Data as of end of most recent month). For an explanation of our ratings, click here.