NEW YORK (TheStreet Ratings) -- TheStreet.com Ratings initiated coverage of 27 exchange-traded funds, or ETFs, that accrued a sufficient track record of risk and performance data by the end of September 2011. Three of the 27 newly rated exchange-traded funds start out in the 'Buy' range. Seven begin at 'Hold' while 17 earned initial grades in the 'Sell' range.
Only one of the newly rated funds that opened for business September 2010 received our highest possible rating of A+, or Excellent. The exchange-traded fund, PIMCO Build America Bond Strategy (BABZ), returned 16.6% in the last year, beating all other newly rated ETFs on a risk-adjusted return basis.
The PIMCO Build America Bond Strategy ETF targets maximum income, consistent with preservation of capital. The fund seeks to achieve its investment objective by investing at least 80% of its assets in taxable municipal debt securities publicly issued under the Build America Bond program.
The second best newly rated ETF is also a PIMCO fund. Returning 3.8% in a year, the PIMCO Investment Grade Corp Bond Index Fund (CORP) earned a grade of B by seeking to provide total return that closely corresponds to the total return of The Bank of America Merrill Lynch U.S. Corporate Index. The fund invests at least 80% of its total assets in the component securities of that index.With more risk and a better return, the Barclays ETN + VEQTOR ETN (VQT) starts off with an initial rating of B-. The fund, whose full name is Barclays ETN+ ETNs Linked to the S&P 500 Dynamic VEQTORTM Total Return Index, provides investors with the ease of exchange-traded access to US equity returns with a an implied volatility hedge, designed by Standard & Poors, to provide an alternative to the S&P 500. The Barclays ETN+ VEQTORTM ETN is linked to the performance of the S&P 500 Dynamic VEQTORTM Total Return Index. As an exchange-traded note that pays cash at maturity, this security closely tracks the underlying index, trading at a premium of just 0.01%. Key S&P 500 drivers include Exxon Mobil (XOM), (AAPL), Intl Business Machines (IBM), and Microsoft (MSFT).
Research MethodologyTheStreet.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. 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." -- Reported by Kevin Baker in Jupiter, Fla.
For additional Investment Research check out our Ratings Research Center.
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