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.

 
 
Feb 26, 2017
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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
New Issue: Assessing the Total Cost of ETF Ownership

The PDF version of the February issue of ETFInvestor is now available for download.

The iPad version will be available in approximately 3 business days.

Exchange-traded funds have become the investment wrapper of choice for a growing number of investors ranging from institutions to individuals. Transparency, tradability, tax efficiency, and low costs are the trademarks of the ETF package. Fees in particular are a critical input in investors’ ETF selection process. But when it comes to choosing an ETF—particularly when picking among funds tracking identical or substantially similar benchmarks—it’s important to look beyond the headline fee and take a more holistic approach to assessing the total cost of ETF ownership. In this month’s cover, I outline the components of the total cost of owning an ETF, address how to size them, and discuss how their relative importance varies depending on an investor’s circumstances.

Also in this issue:

  • Fee fights amongst providers of index funds and ETFs are inarguably great for investors, but I caution against the perils of being a penny wise when it comes to price shopping.
  • I look at the rationale behind the launch of a trio of new actively-managed ETFs from Davis Advisors
  • Phillip Yoo profiles Vanguard Tax-Exempt Bond ETF VTEB which carries a Morningstar Analyst Rating of Silver.
  • Adam McCullough shares his analysis of Bronze-rated Technology Select Sector SPDR ETF XLK.
  • Alex Bryan asks, “Are high-yield ETFs junk?”
  • Adam McCullough demonstrates the importance of digging deeper when it comes to measuring diversification.
  • In this month’s Sector Snapshot, I look at why tech took off in February.

You can download this month's issue here:
http://etf.morningstar.com/Newsletter.aspx?download=currentIssue

Best,

Ben Johnson, CFA

Portfolio Holdings
Income Portfolio
ETF
YTD Ret %
Price $
1.4
105.6
CASH$
N/A
1.0
6.4
52.0
5.0
64.3
3.3
20.9
1.8
28.2
3.3
45.0
5.0
24.4
4.3
32.1
Global Asset Allocation Portfolio
ETF
YTD Ret %
Price $
1.4
105.6
CASH$
N/A
1.0
6.4
52.0
3.3
20.9
1.8
28.2
3.3
45.0
5.0
38.4
6.6
90.8
5.0
24.4
4.3
32.1
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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