In the first quarter of 2018, CFRA’s Overweight (top) rated ETFs declined just 0.5%, outperforming the S&P 500 Equal Weight index by approximately 175 basis points. On a three-year annualized basis and since inception in 2008, the top-rated ETFs rose 11.2% and 15.9%, respectively, 100 basis points stronger than the benchmark. Equally important, the ETFs that we like the least, the Underweight rated ones, underperformed the index by more than 500 basis points since inception; however, they did outperform the index in the three-year period.
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CFRA’s rating on more than 1,100 equity ETFs combines holdings-level analysis with fund attributes to provide a more holistic and forward-looking view. Although we believe investors should not rely on past performance when comparing ETFs, we do think a track record on fund selection is worth of scrutiny.
Todd Rosenbluth is Director of ETF & Mutual Fund Research at CFRA.