About the Editor
Ben Johnson, CFA, is director of global ETF research for Morningstar. Before assuming his current role in 2012, he was director of ETF research for Europe and Asia. He also previously served as a senior equity analyst, covering the agriculture and chemicals industries. Before joining Morningstar in 2006, he worked as a financial advisor for Morgan Stanley.

Johnson holds a bachelor's degree in economics from the University of Wisconsin. He also holds the Chartered Financial Analyst® designation. In 2015, Fund Directions and Fund Action named Johnson among the 2015 Rising Stars of Mutual Funds.


Investment Strategy
Morningstar ETFInvestor scans the globe for value and improving fundamentals across virtually all asset classes. Editor Ben Johnson draws upon academic and practitioner research — including Morningstar's sizeable bench of stock, bond and fund analysts — to find reliable drivers of outperformance.

Morningstar ETFInvestor features two real-money portfolios.

The ETF Income Portfolio assembles a high-quality collection of income-generating ETFs with the goal of earning 5% in excess of the 30-day T-bill rate over a full business cycle. The portfolio adheres to a benchmark-agnostic strategy in its search for absolute returns.

The ETF Global Asset Allocation Portfolio, on the other hand, is more benchmark sensitive. It seeks undervalued asset classes with improving fundamentals. The strategy seeks to beat the 60/40 MSCI ACWI/Barclays US Aggregate benchmark over a full business cycle, with the least risk possible.

 
 
Jun 29, 2016
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About Editor Editor's Photo
Ben Johnson, CFA,
Director, Global ETF Research and Editor
Ben Johnson, CFA, is director of global ETF research for Morningstar. Before assuming his current role in 2012, he was director of ETF research for Europe and Asia. He also previously served
Featured Posts
ETFInvestor Weekly Update - June 24, 2016

Keep Calm and Carry On


No one has any idea what the near- or long-term implications of “Brexit” will be. Not you, certainly not me, and no one who has been babbling on ad nauseam about the impact of the UK’s decision to leave the European Union. No one can guess what might result from this decision with respect to politics, economics, financial markets, you name it. Of course, the market loathes this sort of uncertainty. So it was little surprise that there was a worldwide sell off that resulted.

Back when we were free range beasts roaming the savannah, there was no upside to sticking around to find out whether it was a hungry predator or merely a gentle breeze rustling the nearby tall grass. Those of us who are still around today should be thankful to have distant ancestors who sprinted in the opposite direction without hesitation. Of course, these same instincts that kept our predecessors from being lunch can lead make us to make bad decisions—especially when it comes to investing---now.

I urge everyone to keep calm and carry on. There is unquestionably a huge amount of uncertainty in the markets today. But it is worth asking 1.) When is that ever not the case? And 2.) Are events like this really going to have a lasting impact on your long-term financial goals?

Last week, Austan Goolsbee, an economist and a professor of economics at The University of Chicago's Booth School of Business, spoke at our Morningstar Investment Conference in Chicago. He posed a hypothetical to the audience (and I’m paraphrasing here). Suppose you asked someone at the turn of the 21st century what $1 invested in the U.S. stock market would be worth by 2016. What might they guess? Now suppose that you asked that same question, but shared with your subject a short list of all of the horrible things that were to transpire over that span (wars, disease, Goolsbee also threw in Justin Bieber for levity’s sake), what would their response be then?

The market has seen far worse than Brexit. Investors’ ability to reap the rewards is a factor of their ability to keep their wits about them when most of the voices they are hearing are telling them to do otherwise.

Best,

Ben

 


 

From Morningstar.com

Christine Benz, Morningstar’s Director of Personal Finance, provides a useful check-list for investors looking to make the most of market volatility.

At last week’s Morningstar Investment Conference, I had the opportunity to moderate a panel discussion between Rob Arnott of Research Affiliates and Cliff Asness of AQR. It was a wide-ranging and engaging conversation covering topics ranging from market efficiency to factor timing. Following our panel I filmed video interviews with both my panelists. You can find the first and second parts of my interview with Rob here and here. You’ll find my interview with Cliff here.

Elsewhere…

Cliff Asness fires back at Research Affiliates in “My Factor Phillipic”. He argues that Research Affiliates’ “’newly’ discovered timing tool is, yet again, mostly just a version of regular old value investing.” As opposed to trying to actively time factor exposures, Asness argues that “investors are better off identifying factors they believe in, and staying diversified across them, unless we see far more extreme pricing than we do today.”

Ben Carlson dusted off and updated a post from his “A Wealth of Common Sense” blog that is every bit as relevant today as it was when he first wrote it in 2014. You can read “Get Ready For The Bull Market in Opinions” here.

Portfolio Holdings
Income Portfolio
ETF
YTD Ret %
Price $
2.8
107.1
CASH$
N/A
1.0
3.2
50.2
-0.3
64.7
5.0
18.9
-0.2
27.3
4.2
40.2
-7.7
22.0
Global Asset Allocation Portfolio
ETF
YTD Ret %
Price $
2.8
107.1
CASH$
N/A
1.0
3.2
50.2
5.0
18.9
-0.2
27.3
4.2
40.2
-6.6
34.3
3.6
80.6
-7.7
22.0
Most Popular ETFs
ETF Name
YTD Rtn %
3 Yr Rtn %
Trading Vol.
NASDAQ 100 Trust Shares
-10.76
1.45
125,000,944
SPDRs
-3.64
2.68
87,466,496
Semiconductor HOLDRs
-6.23
-11.66
26,838,700
iShares MSCI Japan Index
-6.59
7.18
17,256,500
iShares Russell 2000 Index
-7.46
6.43
16,210,700
Energy Select Sector SPDR
15.88
15.50
14,900,000
Financial Select Sector SPDR
-8.42
2.61
11,612,800
DIAMONDS Trust, Series 1
-3.75
2.21
7,350,600
Utilities Select Sector SPDR
6.84
6.82
3,848,200
Materials Select Sector SPDR
-4.31
8.50
2,179,300
 
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