Seeking Alpha’s new ETF Grades will help you make sense of the more than 1,800 ETFs, doing the hard work of separating the best-in-class from the worst.
Our proprietary Quant grading system helps you instantly characterize and evaluate an ETF in seconds.
While very simple and easy to use, the grading system is highly engineered as it captures, filters, and scores numerous ETF data points into five categories: Momentum, Expenses, Dividends, Risk, and Asset Flows.
The ETF grades were developed by an expert team with deep experience in successfully predicting stock performance.
ETF Grades are exclusive to Seeking Alpha Premium and PRO subscribers, and available on both desktop and mobile.
If you are an ETF investor, how do you make sure you own a fund with the best performance? How do you measure an ETF with the lowest expense fees? How do you assess your fund’s risk? How do you monitor that the dividend is safe and strong?
The answer: Use Seeking Alpha's new ETF Grades, which appear on ETF ticker symbol pages.
The grades are simple and fast to use, but under the hood they are tremendously sophisticated. They were created by an expert in using data to predict stock performance: Steve Cress, Seeking Alpha's Head of Quant Strategies. Steve has 30 years of experience in equity research, quant strategies, and risk management, and he’s the founder of the quant hedge fund Cress Capital Management.
Here’s How ETF Grades Work:
Seeking Alpha’s Quant ETF Grades provide investors with an instant characterization of each ETF. That makes it easy to hunt down or rule out ETFs based on your own particular investment criteria. Seeking Alpha grades each ETF by five “factors” - Momentum, Expenses, Dividends, Risk, and Asset Flows. To do this, we compare a given ETF’s relevant metrics with those of other ETFs in that same asset class. The factor is then assigned a grade, from A+ to F.
The Momentum Grade
The Momentum Grade tells you the ETF’s price performance and total return (price performance plus dividend distributions) as compared with those of other ETFs within the same asset class. In other words, you no longer have to sort through hundreds of ETFs or screens to identify the best-performing ones in an asset class. Our ETF Grade captures it instantly.
The Expenses Grade
The Expenses Grade tells you how the ETF’s expense fee measures up against those of others in its asset class. Once again, our advanced computer model assesses hundreds of ETFs and does the hard work for you - no longer will you need to wade through reams of funds or screens to pick out the one with the lowest fee in the asset class.
The Dividend Grade
The Dividend Grade gives you all of the following crucial data wrapped up into a single ETF Dividend Grade:
- How safe the ETF’s dividend is - that is, the risk for a potential cut;
- Ability to raise the payout;
- Consistency in paying; and
- The yield’s attractiveness compared with all other ETFs in its asset class.
Embedded in the grade, among other things, are measures of an ETF’s dividend-raising track record; how consistently ETF component companies have paid a dividend; and how consistently companies have raised their payout over during the life of the ETF vs. that for other ETFs in the asset class. Also baked into the grade are actual dividend yields and historical dividend growth rates over a range of periods. So if you’re a dividend investor, the Dividend Grades help ensure that your ETF dividend income is safe, and that your payouts and income will climb over time.
The Risk Grade
The Risk Grade alerts you to various types of financial risk that threaten or hamper the potential growth or stability of a given ETF compared with others in its asset class. In general, ETFs are considered low-risk because they have diversified portfolios and low expenses. But not all ETFs are created equal, and each has its own unique characteristics. Encapsulated in the Seeking Alpha Risk Grade are sophisticated measures that size up portfolio risk, liquidity risk, concentration risk, volatility risk, trading risk, tracking error risk, and short-interest risk. All of this vital risk information is encapsulated in a single grade that allows you to see how one ETF’s risk compares with all the others in its asset class.
The Asset Flow Grade
The Asset Flow Grade measures the movement of cash into and out of a given ETF. For those purposes, the ETF’s assets under management are measured over various time periods, ranging from months to years, and the grade also factors in average daily share volumes and average daily dollar volumes. These measures provide a view into investor behavior and are often considered a signal or indicator of investor sentiment. The Asset Flow Grade allows you to stack an ETF’s increase or decrease in assets, and its share volume, against other ETFs in its asset class.
Frequently Asked Questions
Where do I find the ETF Grades?
ETF Grades are displayed on symbol pages for Premium and PRO subscribers and are available on the SA desktop website, mobile web, and our mobile apps. To see them:
- Ensure you are logged in to the desktop website or mobile app as a Premium or PRO subscriber.
- Enter the stock symbol in the search box at the top of the page.
- Hit Enter.
- When you land on the symbol page on desktop, you'll see the ETF Grades in the right-hand column (where ads are for free users).
- On mobile web or in the Seeking Alpha iOS or Android app, you’ll see the ETF Grades directly below the graph on symbol pages.
How do Seeking Alpha’s ETF Grades differ from Seeking Alpha’s Factor Grades and Dividend Grades?
The Dividend Grades are built for investors looking for income and income growth rather than stock-price performance. Because of that, the Dividend Grades don’t take into account momentum and earnings revisions, both of which are strongly predictive of a stock’s future direction and are included in our Factor Grades and overall Quant Rating. In addition, Dividend Grades cover only stocks that pay dividends, whereas Factor Grades and the overall Quant Rating also cover the thousands of stocks that don’t pay dividends. ETF Grades measure exchange-traded funds against other like-for-like ETFs on the basis of Momentum, Expenses, Dividends (yield and consistency), Risk, and Asset Flows (sentiment).
How frequently are Seeking Alpha’s ETF Grades updated?
Every day, before the U.S. market opens.
How can I access the ETF Grades?
ETF Grades are one of many features in Seeking Alpha Premium. If you are not a subscriber, and would like to test whether the grades make you a more successful dividend investor, start your Premium subscription here.
