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Top-Rated ETFs Invest in Foreign Stocks

Stock quotes in this article: MXWL, THC, CYH, ISRG 

NEW YORK (TheStreet) -- The best bets in exchange traded funds invest in commodities and international stocks, according to TheStreet.com Ratings.

Of the 10 top-rated funds, six invest in stocks outside the U.S. and three target precious metals or coal. All the funds have "buy" recommendations, but three have earned our top grade of A-plus.

The PowerShares Global Progressive Transportation Portfolio (PTRP), the best-rated fund, has gained 17% in the past year. The fund advanced as shares of Maxwell Technologies (MXWL) and Westport Innovations (WPRT) doubled.

The second-best rated ETF, First Trust Health Care AlphaDEX Fund (FXH), which has climbed 12% in the past year, is positioned to benefit as health care reforms bring the company new customers. More than half of the fund focuses on health care products and services, while 36% is invested in drugmakers and biotechnology. Hot holdings include Tenet Healthcare (THC), Community Health Systems (CYH) and Intuitive Surgical (ISRG), which have risen by more than 40%.

Despite all the hype surrounding alternative energy, coal remains a popular energy source. The PowerShares Global Coal Portfolio (PKOL) has increased 22%. Industry leaders Massey Energy (MEE) and Patriot Coal (PCX) have doubled in value this year. An economic rebound would boost demand for energy, making this an attractive ETF.

Best Rated Exchange-Traded Funds
Fund (Ticker) Initial Rating
Objective
Total Return 1 Year
PowerShares Global Progressive Transportation (PTRP) A+
Global Equity
16.57%
First Trust Health Care AlphaDEX Fund (FXH) A+
Health/Biotech
11.61%
PowerShares Global Coal Portfolio (PKOL) A+
Energy/Natural Res
22.18%
iShares MSCI All Country Asia ex Japan Index Fund (AAXJ) A
Non-US Equity
28.51%
iShares MSCI Israel Capped Index Fund (EIS) A
Non-US Equity
20.31%
PowerShares Global Steel Portfolio (PSTL) A-
Global Equity
13.99%
Rydex S&P Equal Weight Materials ETF (RTM) A-
Energy/Natural Res
17.74%
PowerShares DB Precious Metals Fund (DBP) A-
Precious Metals
21.93%
SPDR S&P Emerging Middle East & Africa ETF (GAF) A-
Emerging Markets
23.63%
PowerShares Global Agriculture Portfolio (PAGG) A-
Global Equity
21.47%
Source: TheStreet.com Ratings

The best-performing ETFs in the third quarter held shares of small- and mid-cap airlines and Brazilian companies.

The worst-performing ETFs bet on higher volatility, a rising U.S. dollar and the natural gas.

To find the best rated open-end equity funds, check out our Top Rated Mutual Funds page.

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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