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

(TLH) - Get iShares 10-20 Year Treasury Bond ETF Report

, earning the highest possible rating of A-plus. This was followed closely by the

iShares Lehman 3-7 Year Treasury Bond Fund

(IEI) - Get iShares 3-7 Year Treasury Bond ETF Report

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

(XLP) - Get Consumer Staples Select Sector SPDR Fund Report

, with the biggest concentrations being in

Procter & Gamble

(PG) - Get Procter & Gamble Company Report


Wal-Mart Stores

(WMT) - Get Walmart Inc. Report


Philip Morris

(PM) - Get Philip Morris International Inc. Report



TheStreet Recommends

(KO) - Get Coca-Cola Company Report



(CVS) - Get CVS Health Corporation Report



(PEP) - Get PepsiCo, Inc. Report



(BUD) - Get Anheuser-Busch InBev SA/NV Sponsored ADR Report

and the newest member of the

Dow Jones Industrial Average


Kraft Foods



Ironically, both a bullish and bearish play on the U.S. dollar are listed below. The

PowerShares DB US Dollar Index Bullish Fund

(UUP) - Get Invesco DB US Dollar Index Bullish Fund Report

did well in August, while the

CurrencyShares Mexican Peso Trust


has done well over the past year.

For more information, check out an

explanation of our ratings


Kevin Baker became the senior financial analyst for TSC Ratings upon the August 2006 acquisition of Weiss Ratings by, 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.