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TheStreet Open House

Barclays Dominates List of Best-Rated ETFs

TSC Ratings provides exclusive stock, ETF and mutual fund ratings and commentary based on award-winning, proprietary tools. Its "safety first" approach to investing aims to reduce risk while seeking solid outperformance on a total return basis.

Barclays (BCS) dominates the list of the 25 best-rated exchange-traded funds on the strength of its fixed-income funds during the longest recession in more than half a century.

Twenty-one of the 25 most highly rated ETFs are owned by Barclays or track a Barclays index.

TheStreet.com Ratings

Barclays agreed to sell its iShares ETFs to CVC Capital Partners for $4.4 billion. The pending sale is bullish for Barclays in that the deal locks in a fair price while allowing the company to continue to shop iShares to other potential suitors until the acquisition closes. Also, if CVC successfully resells iShares, Barclays gets 20% of the increase in cash.

Barclays retains the revenue generated from the securities servicing for iShares, although State Street (STT) and Bank of New York Mellon (BK - Get Report) have been cited as potential bidders on this business.

The three best-rated exchange-traded funds based on March 31 data are Market Vectors-Barclays AMT-Free Short Municipal ETF (SMB), SPDR Barclays Capital Short Term Municipal Bond ETF (SHM) and the iShares Barclays 10-20 Year Treasury Bond Fund (TLH). In this time of financial uncertainty, the "buy"-rated fixed income ETFs listed below can be used to balance the overall risk in an investor's portfolio.

The only two non-fixed-income ETFs with top grades on the list are bullish currency plays. The PowerShares DB US Dollar Index Bullish Fund (UUP) is a bet on the U.S. dollar against the euro, Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc. The Market Vectors-Renminbi/USD ETN (CNY) uses short-term forward contracts to benefit from a rise in China's currency in relation to the U.S. dollar.

Best-Rated Exchange Traded Funds
Fund (Ticker)
Overall Grade
Reward Grade Risk Grade Objective
Market Vectors Short Muni (SMB) A+ A+ B Municipal - National
SPDR Barclays Cap Short Term Muni B (SHM) A+ A+ B+ Municipal - National
iShares Barclays 10-20 Yr Treasury (TLH) A+ A+ B Government Bond
iShares Barclays 3-7 Year Treasury (IEI) A+ A B+ Government Bond
PowerShares DB US Dollar Bullish Fd (UUP) A+ A+ B Currency
SPDR Barclays Cap Interm Term Trs E (ITE) A+ A B Government Bond
iShares Barclays 1-3Yr Treasury Bd (SHY) A+ A B Government Bond
iShares Barclays 7-10Yr Treasury Bd (IEF) A+ A+ B Government Bond
PowerShares VRDO Tax-Free Weekly (PVI) A+ A- B+ Municipal - High Yield
iShares Barclays MBS Bond Fd (MBB) A+ A B General Mortgage
Market Vectors Interm Muni (ITM) A+ A+ B Municipal - National
iShares Barclays Aggregate Bd (AGG) A+ A B General Bd - Investment Grade
iShares Barclays Intrm Govt/Crdt Bd (GVI) A+ A- B General Bd - Investment Grade
iShares Barclays Govt/Credit Bd (GBF) A+ A- B Government Bond
iShares S&P National Municipal Bond (MUB) A+ A B Municipal - National
SPDR Barclays Cap Muni Bond ETF (TFI) A+ A+ B Municipal - National
iShares Barclays Short Treasury Bd (SHV) A+ B+ B+ Government Bond
SPDR Barclays Cap Aggregate Bnd ETF (LAG) A+ A- B General Bd - Investment Grade
iShares S&P CA Municipal Bond (CMF) A+ A+ B Municipal Single State
Market Vectors Chinese Renminbi USD (CNY) A+ A B Currency
Claymore US Cp Mkt Micro Trm Fx Inc (ULQ) A+ B+ B General Bd - Investment Grade
Vanguard Short Term Bond ETF (BSV) A+ A- B General Bd - Investment Grade
SPDR Barclays Cap 1-3 Month T-Bill (BIL) A+ B+ B Government Bond
SPDR Barclays Cap CA Muni Bond ETF (CXA) A+ A B Municipal - National
iShares Barclays TIPS Bond (TIP) A+ A B Government Bond
Source: TheStreet.com Ratings

The grades can be interpreted as follows: A is "excellent" or "buy." B is "good" or "buy." C is "fair" or "hold." D is "weak" or "sell." And E is "very weak" or "sell." A plus or minus sign designates that a fund is in the top or bottom third of funds with the same letter grade.

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SYM TRADE IT LAST %CHG
CNY $42.70 -0.02%
SHM $24.32 0.08%
SST $30.27 0.17%
SMB $17.58 0.11%
UUP $25.65 0.04%

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