ETF Ratings Service Launched

XTF has introduced a ratings service that rates ETFs based on 16 metrics over two broad categories: investment metrics and structural integrity.

The free service will allow all investors to make more educated decisions when choosing which ETFs to invest in, the firm said. XTF, an asset manager that creates portfolios composed of ETFs, will use the same criteria for eligibility in its rating service as it does in constructing its portfolios: an ETF must have been trading for a minimum of six months and exhibit enough transparency so that XTF can research its fundamental factors.

The structural integrity measures include, among others:

  • Tracking error, which displays at least six months of daily performance data to track how an ETF has matched its benchmark
  • Tax efficiency
  • Expense and Bid-Ask Ratios

The investment metrics include, among others:

  • Risk-adjusted historical performance (6-month, 1-, 3- and 5-year)
  • Yield measures, including earnings and dividend yields and yield-to-maturity figures
  • Short-term vs. long-term price movement
  • Diversification score, which applies to commodities and currencies, and measures the overall diversification (across asset classes, industries, geography, etc.) within an ETF

The rating service is available on XTF’s Web site at