TheStreet.com Ratings initiated coverage of 32 exchange traded funds, with half earning "buy" ratings.
Three of these 16 ETFs received our highest grade, A-plus. Among the remaining 16 funds, six funds earned "hold" ratings, while 10 were rated "sell."
iShares had more newly rated ETFs this month than any other fund group. The
iShares S&P Target Date 2020 Index
, a fund of funds for investors planning to retire in 2020, earned an A-plus grade. It holds a portfolio of other iShares ETFs to create an asset allocation that's 54% domestic stocks, 29% U.S. bonds, 15% international stocks and 2% domestic real estate.
The largest portion of the 2020 portfolio tracks the S&P 500 Index and companies like
Procter & Gamble
Johnson & Johnson
. The fund has earned 20% in the past year, trailing the 23% advance of the
S&P 500 Index
With target-date funds, the asset mix becomes more conservative over time, shifting from stocks to bonds. Five other iShares target-date ETFs earned "buy" ratings.
RevenueShares ADR Fund
also received an A-plus grade. Its shares have jumped 39% in the past year.
The fund follows an index that tracks American depositary receipts of foreign companies, including Brazilian steel producers
Companhia Siderurgica Nacional
, and British miner
. The shares of each company have doubled in the past year.
The iShares funds have been slow to catch on with customers. The S&P Target Date 2020 has about $6 million in assets. The fund's average daily trading volume was 208 shares during a recent five-day period. The newly rated iShares ETFs averaged 5,000 shares a day.
In contrast, the newly rated Direxion funds have average daily trading volume of 16 million shares. The
Direxion Daily Financial Bear 3X Shares
weigh in at $1.2 billion in assets and average a daily volume of 52 million shares.
While the ETF has lost 52% in the past year, it has become a popular vehicle for betting against
Bank of America
and the other financial institutions. This ETF's triple-leveraged strategy magnifies daily movements of these volatile stocks.
TheStreet.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 lagged behind the market. While there is no guarantee of future performance, these ratings provide a solid framework for making informed investment decisions. The funds listed below have been trading for at least a year.
Grades of A or B are considered "buy." C equals "hold," while D and E amount to "sell" ratings.
Kevin Baker became the senior financial analyst for TSC Ratings upon the August 2006 acquisition of Weiss Ratings by TheStreet.com, covering mutual funds. He joined the Weiss Group in 1997 as a banking and brokerage analyst. In 1999, he created the Weiss Group's first ratings to gauge the level of risk in U.S. equities. Baker received a B.S. degree in management from Rensselaer Polytechnic Institute and an M.B.A. with a finance specialization from Nova Southeastern University.