The list of best-rated exchange-traded funds in August signals caution and reflects the flight to quality sought by many investors. Six of the 10 best-rated ETFs are fixed-income funds.
In a shift to more conservative portfolios in August, bonds rallied while their yields dipped. Government bond funds of various targeted maturities outranked other ETFs.
The long-term bonds did the best with the
iShares Lehman 10-20 Year Treasury Bond Fund
, earning the highest possible rating of A-plus. This was followed closely by the
iShares Lehman 3-7 Year Treasury Bond Fund
in second place.
The two equity funds to make the cut focus on industries with some protection from recession. The ever inflating cost of health care boosted the fortunes of the
HealthShares Enabling Technologies ETF
Also, there are some products in the categories of food, beverages and hygiene that are considered the basic necessities of life. These are sold by the companies in the
Consumer Staples Select Sector SPDR Fund
, with the biggest concentrations being in
Procter & Gamble
and the newest member of the
Dow Jones Industrial Average
Ironically, both a bullish and bearish play on the U.S. dollar are listed below. The
PowerShares DB US Dollar Index Bullish Fund
did well in August, while the
CurrencyShares Mexican Peso Trust
has done well over the past year.
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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.