Few New Funds Get 'Buy' Recommendation

Only steady or conservative funds received "buy" recommendations from TheStreet.com Ratings.
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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.

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The

Federated Target ETF 2015

(FTOAX)

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

(IVV) - Get Report

. With an expense ratio of 0.75%, it doesn't burden holders with excessive management costs.

The

ING Lifestyle Moderate Portfolio Fund

(ILMAX)

is a B-plus rated fund of funds with about equal percentages of equity and fixed-income holdings.

Finally, the

Vanguard Dividend Appreciation Index Fund

(VDAIX) - Get Report

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

Wal-Mart

(WMT) - Get Report

,

Procter & Gamble

(PG) - Get Report

,

Johnson & Johnson

(JNJ) - Get Report

and

Exxon Mobil

(XOM) - Get Report

.

The four members of the

ProFunds

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

(UUPIX) - Get Report

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

(UVPIX) - Get Report

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

(UNPIX) - Get Report

and the

ProFunds-Ultra Short International

(UXPIX) - Get Report

, 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.