NEW YORK (
has initiated coverage of seven exchange-traded funds, or ETFs, that accrued a sufficient track record of risk and performance data by the end of October 2011.
None of these seven newly rated exchange-traded funds start out in the 'Buy' range. Only one begins at 'Hold' while six earned initial grades in the 'Sell' range.
The one newly rated fund that opened for business October 2010 received our highest possible 'Hold' rating of C+, or fair. The exchange-traded fund,
ETFS Physical Precious Metals Basket Shares
, returned 21.2% in the last year, beating all other newly rated ETFs on a risk-adjusted return basis.
The ETFS Physical Precious Metals Basket Shares seeks to reflect the performance of the price of physical gold, silver, platinum and palladium bullion in the proportions held by the Trust, less the expenses of the Trust's operations. Currently, each 50,000 share unit is worth a basket of 1491 oz of gold, 54,655 oz of silver, 199 oz of platinum, and 298 oz of palladium. The fund's ticker symbol is appropriately pronounced as glitter.
The second best newly rated ETF ranks at the top of the 'Sell' range. Losing just 6.2% in a year, the
Cambria Global Tactical ETF
earned a grade of D+ by seeking to preserve and grow capital from investments in the U.S. and foreign equity, fixed income, commodity and currency markets, independent of market direction with the absolute return goal of reduced volatility, risk, and drawdowns.
The Cambria Global Tactical ETF invests in other ETFs allocated to 74% U.S. fixed income, 6% U.S. stocks, 6% currencies, 5% commodities, and 2% international fixed income. Top holdings include 12.4% in
PIMCO Enhanced Short Maturity Strategy Fund
, 12.32% in
Vanguard Total Bond Market ETF
and 12.2% in
Vanguard Short-Term Bond ETF
The only other newly rated ETF with a positive first-year performance,
Credit Suisse Merger Arbitrage Index ETN
, returned 1.9% with an initial grade of D. The fund seeks to employ the merger arbitrage strategy by using a quantitative methodology to track a dynamic basket of securities held as long or short positions and cash weighted in accordance with the index rules to reflect publicly announced merger transactions that meet certain qualifying conditions.