CFRA’s ETF ratings methodology reflects the unique nature of ETFs, apart from Mutual Funds, and the rapid changes within the ETF space through an advanced machine-learning based solution that considers critical factors across Reward, Risk and Cost sub-categories to assess a fund’s position relative to peers. This unique approach enables investors and advisors to identify ETFs with consistent records of success in both up and down markets, which is beneficial as the return of volatility seems likely to be on the horizon.
- Rating approach blends CFRA’s proprietary forensic and fundamental approaches, including earnings quality scores and STARS (Stock Appreciation Ranking System), which offer a proven approach to equities analysis.
- CFRA starts classifying ETFs within the first few months of their history, much earlier than other research providers.
- CFRA prioritizes forward-looking metrics and the unique characteristics of the fund’s holdings, rather than solely relying on historical performance.
- Ratings are updated on a monthly basis.
- Utilizes proprietary First Bridge Data, the most comprehensive database of ETF constituent holdings data, reference and classification data, investment analytics, and daily pricing, flows and statistics.