September 13, 2007 at 8:00 am by Tom Lydon
Exchange traded funds (ETFs) might soon meet the STARS system, which is a product of Standard & Poor’s that began in 1987. Under this system, S&P analysts have ranked more than 1,500 stocks between one to five stars, with five being the best. Selena Maranjian for The Motley Fool explains that the companies with a five-star rating actually have beaten the S&P in 15 of those 19 years.
Investing in an index holding only five-star rated stocks is easier than ever. S&P has released two new indexes based upon the STARS rating system: The S&P U.S. STARS Index and the S&P Europe STARS Index. An ETF or some other investment vehicle to invest in these indexes could be just around the corner.
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