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
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 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.