My ratings on ETFs are unique because they are based on my stock ratings for each of a fund’s holdings.
Analyzing and rating an ETF based on its holdings delivers many interesting insights:
The radically higher number of US equity mutual funds (4,700+) versus ETFs (380+) is not indicative of better stock selection from active management. On the contrary, the vast majority of actively-managed funds do not justify the higher fees they charge. They do not, in terms of stock selection and expected returns, add value versus passively managed benchmarks.
New Constructs assigns a rating to every stock under coverage according to what we believe are the 5 most important criteria for assessing the risk versus reward of stocks. New Constructs’ stock ratings are regularly featured as among the best by Barron’s.