Skip to main content

The health/biotechnology sector dominated half the top 10 list of the most recently improved exchange-traded funds, as measured by improvements in their grades computed by


A pair of "green" ETFs also adorn the most-improved section of the accompanying table of major grade changes. The

Market Vectors Environmental Industry ETF


recently improved from a mark of C-minus from

Ratings' objective grading system to an A, elevating it from a "hold" to a "buy" recommendation.

Perhaps it's a sign of the times that an environmental fund and an alternative energy ETF appear in the "most improved" section while two more energy funds that focus on the more traditional petroleum side of the energy industry populate the "most deteriorated" section of the table.


Market Vectors Global Alternative Energy ETF


climbed from an E grade, which equates to a "sell" recommendation, to a mark of C-minus.

Closely related to the environmental funds are two that invest in the business of supply water. The

PowerShares Water Resources ETF


moved from a D to a B-minus grade, while the

First Trust ISE Water Index Fund


climbed from an E-plus to a mark of C.

Of all the upgrades, the

First Trust Amex Biotechnology ETF


stood out performancewise. Its double-digit gains of 15.57% and 13.45% for the most recent three months and 12 months, respectively, pulled its grade from a C-minus to an A.

FBT's major portfolio holdings include

Vertex Pharmaceuticals









Gilead Sciences



The perils of leverage are graphically demonstrated in the six ETFs on the list that suffered major deteriorations in grades. Five of them include "ultra" in their respective names, indicating gearing that hurts on the downside just as much as it supplies additional pleasure when prices are rising.

The only nonleveraged fund on the bottom section of the table is the

Wisdom Tree International Energy ETF


, whose grade tumbled from an A to a C-plus. That reduced its recommendation from

Ratings from a "buy" to a "hold".

Another energy ETF, the leveraged

ProShares Ultra Oil & Gas


, is also found on the lower list.

DKA's major holdings include










Royal Dutch Shell



Richard Widows is a senior financial analyst for Ratings. Prior to joining, 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.