Top-Rated ETFs Invest in Foreign Stocks

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

The second-best rated ETF, First Trust Health Care AlphaDEX Fund(FXH Quote), 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 Quote), Community Health Systems(CYH Quote) and Intuitive Surgical(ISRG Quote), 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 Quote) has increased 22%. Industry leaders Massey Energy(MEE Quote) and Patriot Coal(PCX Quote) 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.