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.
Only three of 26 newly rated equity funds received "buy" recommendations from TheStreet.com Ratings.
The funds, listed in the accompanying table, sport steady strategies and conservative investments.
Federated Target ETF 2015
earned a B-plus grade from TheStreet.com Ratings by investing in a sensible mix of low-expense exchange traded funds, with its biggest holding the broadly diversified
iShares S&P 500 Index ETF
. With an expense ratio of 0.75%, it doesn't burden holders with excessive management costs.
ING Lifestyle Moderate Portfolio Fund
is a B-plus rated fund of funds with about equal percentages of equity and fixed-income holdings.
Vanguard Dividend Appreciation Index Fund
earned its grade of B by tracking the
Mergent Dividend Achievers Select Index
. With a thin expense ratio of 0.4%, its largest holdings include mainstays such as
Procter & Gamble
Johnson & Johnson
The four members of the
group on the list -- three of which have the worst possible grade of E-minus -- provide a lesson in the perils of leveraged mutual funds.
ProFunds-Ultra Emerging Markets
aims for a daily return of double the percentage change in the
Bank of New York Emerging Markets 50 ADR Index
ProFunds Ultra Short Emerging Markets
endeavors to produce a daily return of twice the amplitude of the opposite of the same gauge. So it might be expected that over time, one should be up and the other down. Yet both are down over the past 12 months and each has suffered sizeable losses over the past three years.
For the "mirror image"
ProFunds Ultra International Fund
ProFunds-Ultra Short International
, both have fallen this year and over the past three years, even though they track, respectively, double the long and short sides of the
MSCI EAFE Index
Richard Widows is a senior financial analyst for TheStreet.com Ratings. Prior to joining TheStreet.com, Widows was senior product manager for quantitative analytics at Thomson Financial. After receiving an M.B.A. from Santa Clara University in California, his career included development of investment information systems at data firms, including the Lipper division of Reuters. His international experience includes assignments in the U.K. and East Asia.