Two Kinds of Weiss Ratings

Weiss Investment Ratings (on stocks, ETFs and mutual funds). These are in the same realm as “buy,” “sell” and “hold” ratings. They are designed to help investors make more informed decisions with the goal of maximizing gains and minimizing risk. Safety is also an important consideration. The higher the rating, the more likely the investment will be profitable. But when using our investment ratings, you should always remember that, by definition, all investments involve some element of risk. Weiss Safety Ratings (on banks, credit unions and insurance companies). These are similar in purpose to credit ratings. They are designed to help consumers find the best institutions to entrust with their hard-earned savings and retirement money. The higher the rating, the more likely the institution will remain financially stable or strong in good times or bad.

When shopping for savings or checking accounts, refer to the Weiss Safety Rating.

When deciding to buy, sell, hold or avoid their shares, refer to the Weiss Investment Rating.

For their insurance policies, refer to the Weiss Safety Rating.

For their shares, refer to the Weiss Investment Rating.

What Does Each Letter Grade Mean?

How Weiss Investment Ratings Differ from Weiss Safety Ratings Weiss Investment Rating Weiss Safety Rating A Strong Buy High probability of stability even in a severely adverse environment, such as a depression or debt crisis. B Buy Probably stable even in an adverse business or economic environment. However, its stability should be re-evaluated at that time. C Hold or Avoid Probably stable in a favorable environment, but may encounter financial difficulties in an adverse environment. D Sell May encounter financial difficulties, including failure, in an adverse business or economic environment. E Strong Sell May encounter financial difficulties, including failure, even in a favorable business or economic environment.

Common Stocks

We provide two kinds of ratings that should not be confused.As you may know, many banks and insurance companies are both (a) institutions that will take your deposits or insurance premiums and (b) held by parent companies you can buy shares in. With Bank of America, for example, you could put your money in a savings or checking account. Or you could buy Bank of America shares traded on the stock exchange. These are two entirely different destinations for your money and merit entirely different kinds of ratings:The same holds true for insurance companies …Both the Weiss Investment Ratings (stocks, ETFs and mutual funds) and the Weiss Safety Ratings (banks, credit unions and insurers) use the same grade scale, as follows:= excellent= good= fair= weak= very weakupper third of each grademiddle third of each gradelower third of each gradeIn addition, in certain industries, we may also usefor failed andfor unrated due to insufficient data.However, in terms of the actions you may want to consider, the Weiss Investment Ratings and the Weiss Safety Ratings are different, as explained in the table below:Below are details of each type of institution or investment.

Weiss Stock Ratings represent a completely independent, unbiased opinion of stocks — now, and in the future. The stocks are analyzed using the latest daily data available and the quarterly filings with the SEC. Weiss takes thousands of pieces of stock data and, based on its own model, balances reward against the amount of risk to assign a rating. The results provide a simple and understandable opinion as to whether we think the stock is a BUY, SELL, or HOLD.

In order to help guarantee our objectivity, we reserve the right to publish ratings expressing our opinion of an investment reward and risk based exclusively on publicly available data and our own proprietary standards for safety. But when using our investment ratings, you should always remember that, by definition, all investments involve some element of risk.

A Excellent. The company’s stock has an excellent track record for providing strong performance with lower-than-average risk, and it is trading at a price that represents good value relative to the company’s earnings prospects. While past performance is no guarantee of future results, our opinion is that this stock is among the most likely to deliver superior performance relative to risk in the future. Of course, even the best stocks can decline in a down market. But our “A” rating can generally be considered the equivalent of a "Strong Buy". B Good. The company’s stock has a good track record for delivering a balance of performance and risk. While the risk-adjusted performance of any stock is subject to change, our opinion is that this stock is a good value, with good prospects for outperforming the market. Although even good investments can decline in a down market, our “B” rating is considered the equivalent of a "Buy". C Fair. In the trade-off between performance and risk, the prospects for the company’s stock are about average based on its track record and current valuation. Thus, we feel it is neither a significantly better nor a significantly worse investment than most other common stocks. Although stocks can be driven higher or lower by general market trends, our "C" rating can generally be considered the equivalent of a "Hold" or “Avoid.” D Weak. The company’s stock is an underperformer relative to other common stocks with a similar amount of risk. While the risk-adjusted performance of any common stock is subject to change, our opinion is that this stock represents a poor investment based on its current valuation and the company’s current financial position. Even weak stocks can rise in an up market. However, our "D" rating can generally be considered equivalent to a "Sell." E Very Weak. In our opinion, the prospects for the company’s stock are not favorable, with significant downside risks outweighing any upside potential. This opinion is based on the company’s current financial condition in combination with the stock’s historical risk-adjusted performance and current valuation. While the risk-adjusted performance of any stock is subject to change, our opinion is that this stock is a poor investment risk. Even some of the weakest stocks can rise in certain market conditions. However, our "E" rating can generally be considered the equivalent of a "Strong Sell." F Bankrupt. Our “F” rating means that the company issuing this stock is currently in bankruptcy proceedings, but it remains under active coverage. Our decision to continue covering bankrupt companies is based on factors such as data availability and quality, and is made on a discretionary basis. Typically, shareholders in a bankrupt company lose their entire investment when the company emerges from Chapter 11 reorganization or liquidates under Chapter 7. Therefore, our opinion is that this stock still has substantial downside risk for investors and very little, if any, upside potential. + The plus sign is an indication that the stock is in the upper third of the letter grade. - The minus sign is an indication that the stock is in the lower third of the letter grade. U Unrated. The stock is unrated for one or more of the following reasons: 1) It is too new to make a reliable assessment of its risk-adjusted performance. (Typically, a stock must have traded for at least one year before it is eligible to receive a Weiss Investment Rating.); 2) Quarterly reports filed with the SEC were either late or missing critical items that Weiss Ratings deems necessary for a thorough analysis; 3) Data anomalies exist that call into question either the accuracy or completeness of the information presently available to Weiss Ratings.

Mutual Funds, Closed-End Funds and ETFs

Weiss Mutual Funds, Closed-End Funds, and Exchange Traded Funds Ratings represent a completely independent, unbiased opinion of funds — now, and in the future. The funds are analyzed using the latest daily data available and the quarterly filings with the SEC. Weiss takes thousands of pieces of fund data and, based on its own model, balances reward against the amount of risk to assign a rating. The results provide a simple and understandable opinion as to whether we think the fund is a BUY, SELL, or HOLD.

In order to help guarantee our objectivity, we reserve the right to publish ratings expressing our opinion of an investment reward and risk based exclusively on publicly available data and our own proprietary standards for safety. But when using our investment ratings, you should always remember that, by definition, all investments involve some element of risk.

A Excellent. The fund has an excellent track record for maximizing performance while minimizing risk, thus delivering the best possible combination of total return on investment and reduced volatility. It has made the most of the recent economic environment to maximize risk-adjusted returns compared to other mutual funds. Although even the best funds can decline in a down market, our “A” rating can generally be considered the equivalent of a "Strong Buy". B Good. The fund has a good track record for balancing performance with risk. Compared to other mutual funds, it has achieved above-average returns given the level of risk in its underlying investments. Although even good funds can decline in a down market, our “B” rating is considered the equivalent of a "Buy". C Fair. In the trade-off between performance and risk, the fund has a track record which is about average. It is neither significantly better nor significantly worse than most other funds. With some funds in this category, the total return may be better than average, but this can be misleading if the higher return was achieved with higher than average risk. With other funds, the risk may be lower than average, but the returns are also lower. Although funds can be driven higher or lower by general market trends, our "C" rating can generally be considered the equivalent of a "Hold" or “Avoid.” D Weak. The fund has underperformed the universe of other funds given the level of risk in its underlying investments, resulting in a weak risk-adjusted performance. Thus, its investment strategy and/or management has not been attuned to capitalize on the recent economic environment. Even weak funds can rise in an up market. However, our "D" rating can generally be considered equivalent to a "Sell." E Very Weak. The fund has significantly underperformed most other funds given the level of risk in its underlying investments, resulting in a very weak risk-adjusted performance. Thus, its investment strategy and/or management has done just the opposite of what was needed to maximize returns in the recent economic environment. Even some of the weakest funds can rise in certain market conditions. However, our "E" rating can generally be considered the equivalent of a "Strong Sell." + The plus sign is an indication that the fund is in the upper third of the letter grade. - The minus sign is an indication that the fund is in the lower third of the letter grade. U Unrated. The fund is unrated because it is too new to make a reliable assessment of its risk-adjusted performance. Typically, a fund must be established for at least one year before it is eligible to receive a Weiss Investment Rating.

Depository Institutions

Ratings Definitions for Depository Institutions

A Excellent. The institution offers excellent financial security. It has maintained a conservative stance in its business operations and underwriting practices as evidenced by its strong equity base, high asset quality, steady earnings, and high liquidity. While the financial position of any company is subject to change, we believe that this institution has the resources necessary to deal with severe economic conditions. B Good. The institution offers good financial security and has the resources to deal with a variety of adverse economic conditions. It comfortably exceeds the minimum levels for all of our rating criteria, and is likely to remain healthy for the near future. Nevertheless, in the event of a severe recession or major financial crisis, we feel that this assessment should be reviewed to make sure that the company is still maintaining adequate financial strength. C Fair. The institution offers fair financial security, is currently stable, and will likely remain relatively healthy as long as the economic environment remains relatively stable. In the event of a severe recession or major financial crisis, however, we feel this company may encounter difficulties in maintaining its financial stability. D Weak. The institution currently demonstrates what, in our opinion, we consider to be significant weaknesses which could negatively impact depositors or creditors. In the event of a severe recession or major financial crisis, these weaknesses could be magnified. E Very Weak. The institution currently demonstrates what we consider to be significant weaknesses and has also failed some of the basic tests that we use to identify fiscal stability. Therefore, even in a favorable economic environment, it is our opinion that depositors or creditors could incur significant risks. F Failed. The institution has been placed under the custodianship of regulatory authorities. This implies that it will be either liquidated or taken over by another financial institution. + The plus sign is an indication that the institution is in the upper third of the letter grade. - The minus sign is an indication that the institution is in the lower third of the letter grade. U Unrated. The institution is unrated due to the absence of sufficient data for our ratings.

Insurance Companies

(commercial banks, savings banks, and credit unions)The Weiss Ratings are calculated based on a complex analysis of hundreds of factors that are synthesized into five indexes: capitalization, asset quality, profitability, liquidity and stability. Each index is then used to arrive at a letter grade rating. A weak score on any one index can result in a low rating, as financial problems can be caused by any one of a number of factors, such as inadequate capital, non-performing loans and poor asset quality, operating losses, poor liquidity, or the failure of an affiliated company.Ourgauges the institution’s capital adequacy in terms of its cushion to absorb future operating losses under adverse business and economic scenarios that may impact the company’s net interest margin, securities’ values, and the collectability of its loans.Ourmeasures the quality of the company’s past underwriting and investment practices based on the estimated liquidation value of the company’s loan and securities portfolios.Ourmeasures the soundness of the company's operations and the contribution of profits to the company's financial strength. The index is a composite of five sub-factors: 1) gain or loss on operations; 2) rates of return on assets and equity; 3) management of net interest margin; 4) generation of noninterest-based revenues; and 5) overhead expense management.Ourevaluates a company's ability to raise the necessary cash to satisfy creditors and honor depositor withdrawals.Finally, ourintegrates a number of sub-factors that affect consistency (or lack thereof) in maintaining financial strength over time. These include 1) risk diversification in terms of company size and loan diversification; 2) deterioration of operations as reported in critical asset, liability, income and expense items, such as an increase in loan delinquency rates or a sharp increase in loan originations; 3) years in operation; 4) former problem areas where, despite recent improvement, the company has yet to establish a record of stable performance over a suitable period of time; and 5) relationships with holding companies and affiliates.In order to help guarantee our objectivity, we reserve the right to publish ratings expressing our opinion of a company's financial stability based exclusively on publicly available data and our own proprietary standards for safety.(commercial banks, savings banks, and credit unions)(life, annuity, health, property and casualty)

The Weiss Ratings of insurers are based upon the annual and quarterly financial statements obtained from state insurance commissioners. This data may be supplemented by information that we request from the insurance companies themselves. However, if a company chooses not to provide supplemental data, we reserve the right to rate the company based exclusively on publicly available data.

The Weiss Ratings are based on a complex analysis of hundreds of factors that are synthesized into a series of indexes: capitalization, investment safety (life, health and annuity companies only), reserve adequacy (property and casualty companies only), profitability, liquidity, and stability. These indexes are then used to arrive at a letter grade rating. A weak score on any one index can result in a low rating, as financial problems can be caused by any one of a number of factors, such as inadequate capital, unpredictable claims experience, poor liquidity, speculative investments, inadequate reserving, or consistent operating losses.

Our Capital Index gauges capital adequacy in terms of each insurer's ability to handle a variety of business and economic scenarios as they may impact investment performance, claims experience, persistency, and market position. The index combines two Risk-Adjusted Capital ratios as well as a leverage test that examines pricing risk.

Our Investment Safety Index measures the exposure of the company's investment portfolio to loss of principal and/or income due to default and market risks. Each investment area is rated by a factor that takes into consideration both quality and liquidity. (This factor is measured as a separate index only for life, health, and annuity insurers.)

Our Reserve Adequacy Index measures the adequacy of the company's reserves and its ability to accurately anticipate the level of claims it will receive. (This factor is measured as a separate index only for property and casualty insurers.)

Our Profitability Index measures the soundness of the company's operations and the contribution of profits to the company's financial strength. The profitability index is a composite of five sub-factors: 1) gain or loss on operations; 2) consistency of operating results; 3) impact of operating results on surplus; 4) adequacy of investment income as compared to the needs of policy reserves (life, health and annuity companies only); and 5) expenses in relation to industry norms for the types of policies that the company offers.

Our Liquidity Index evaluates a company's ability to raise the necessary cash to settle claims and honor cash withdrawal obligations. We model various cash flow scenarios, applying liquidity tests to determine how the company might fare in the event of an unexpected spike in claims and/or a run on policy surrenders.

Our Stability Index integrates a number of sub-factors that affect consistency (or lack thereof) in maintaining financial strength over time. These sub-factors will vary depending on the type of insurance company being evaluated but may include such things as 1) risk diversification in terms of company size, group size, number of policies in force, types of policies written, and use of reinsurance; 2) deterioration of operations as reported in critical asset, liability, income and expense items, such as surrender rates and premium volume; 3) years in operation; 4) former problem areas where, despite recent improvement, the company has yet to establish a record of stable performance over a suitable period of time; 5) a substantial shift in the company's operations; 6) potential instabilities such as reinsurance quality, asset/liability matching, and sources of capital; and 7) relationships with holding companies and affiliates.

In order to help guarantee our objectivity, we reserve the right to publish ratings expressing our opinion of a company's financial stability based exclusively on publicly available data and our own proprietary standards for safety.

Rating Definitions for Insurance Companies

A Excellent. The company offers excellent financial security. It has maintained a conservative stance in its investment strategies, business operations and underwriting commitments. While the financial position of any company is subject to change, we believe that this company has the resources necessary to deal with severe economic conditions. B Good. The company offers good financial security and has the resources to deal with a variety of adverse economic conditions. It comfortably exceeds the minimum levels for all of our rating criteria, and is likely to remain healthy for the near future. However, in the event of a severe recession or major financial crisis, we feel that this assessment should be reviewed to make sure that the firm is still maintaining adequate financial strength. C Fair. The company offers fair financial security and is currently stable. But during an economic downturn or other financial pressures, we feel it may encounter difficulties in maintaining its financial stability. D Weak. The company currently demonstrates what, in our opinion, we consider to be significant weaknesses which could negatively impact policyholders. In an unfavorable economic environment, these weaknesses could be magnified. E Very Weak. The company currently demonstrates what we consider to be significant weaknesses and has also failed some of the basic tests that we use to identify fiscal stability. Therefore, even in a favorable economic environment, it is our opinion that policyholders could incur significant risks. F Failed. The company is deemed failed if it is either 1) under supervision of an insurance regulatory authority; 2) in the process of rehabilitation; 3) in the process of liquidation; or 4) voluntarily dissolved after disciplinary or other regulatory action by an insurance regulatory authority. + The plus sign is an indication that the company is in the upper third of the letter grade. - The minus sign is an indication that the company is in the lower third of the letter grade. U Unrated. The company may be unrated for many reasons including: (1) total assets are less than $1 million; (2) premium income for the current year was less than $100,000; or (3) the company functions almost exclusively as a holding company rather than as an underwriter; or, (4) in our opinion, we do not have enough information to reliably issue a rating.

(life, annuity, health, property and casualty)