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.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.