TheStreet.com Ratings initiated coverage of four closed-end funds and 65 exchange-traded funds that accrued a sufficient track record of risk and performance data by the end of January.
With yesterday's report of 4.3% consumer price index inflation, it's no wonder that the three funds winning A+ ratings did so with traditional inflation hedge investments in gold and silver. The
PowerShares DB Gold Fund
tracks gold futures.
PowerShares DB Silver Fund
follows silver. And, the
PowerShares DB Precious Metals Fund
includes both gold and silver futures.
Excluding food and energy, the consumer price index would only have been up 2.5%. The commodity theme played out positively for
PowerShares DB Energy Fund
with crude oil in the $100 range, earning an A- rating. The
PowerShares DB Agriculture Fund
did even better, scoring an A+ as food prices continue to rise.
Another major theme of the top-rated funds that began trading in January 2007 is fixed-income ETFs. Eight different iShares run the gamut of maturities for both government and corporate bonds. These iShares follow Lehman Brothers fixed income indexes, providing a safe haven during the recent flight to quality.
Small-capitalization stocks falling over the last year propelled
ProShares Short Russell 2000
ProShares Short S&P Small Cap 600
to initial A+ ratings. The leveraged, and therefore more volatile,
ProShares Ultra Short Russell 2000
ProShares Ultra Short S&P Small Cap 600
did nearly as well, starting with A ratings.
Small-cap stocks such as
lost four-fifths of their value over the last year, aiding the performance of these funds.
The four closed-end funds all received "sell" ratings due to their negative performance for the year ending Jan. 31, 2008. The initial ratings are E+ for the
Alpine Total Dynamic Dividend Fund
, E+ for the
Gabelli Global Deal Fund
, E for the
Blackrock Pref and Equity Trust
, and E for the
Nasdaq Premium Income & Growth Fund
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 underperformed the market. While there is no guarantee of future performance, these Investment Ratings provide a solid framework for making informed, timely investment decisions.
The funds listed below have either reached their one-year anniversary.
Funds rated A or B are considered "Buy" rated based on a track record of higher than average risk-adjusted performance. Funds at the C level are rated as "Hold," while underperformers at the D and E levels our model ranks as "Sell."
To find out the detailed definitions of what each level of our rating levels mean,
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.