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 five model portfolios.

The Basic Portfolio harnesses the market's collective wisdom with ultra-low-cost funds and is the baseline portfolio against which the three other portfolios will be compared.

The Defensive Portfolio aims to provide lower volatility, better downside protection, and better risk-adjusted performance than the basic portfolio over the long-term.

The Factor Portfolio is designed to earn higher returns than the basic portfolio over the long-term.

The Income Portfolio attempts to earn a higher distribution yield than the basic portfolio, without taking a lot more risk.

The ESG Portfolio targets firms with strong corporate governance and sustainable environmental and social practices, while offering competitive returns and similar risk to the basic portfolio.

 
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 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.
Featured Posts
New Issue: Green Lights

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

If the link above doesn’t work, you can download this month's issue by copying this address into your browser: http://etf.morningstar.com/Newsletter.aspx?download=currentIssue

This month’s issue is dedicated to environmental, social, and governance investing.

ESG investing has made it into the mainstream in recent years. Shifting investor preferences, new regulation, and mounting climate, social, and governance crises have supported this trend. The asset-management industry has responded. Fund company CEOs are putting ESG at the top of their agendas, new funds are being minted every day, and many old funds are finding new life as ESG-intentional versions of their former selves. The number of ESG exchange-traded funds listed in the United States has jumped to 123 currently from 24 at the end of February 2016. Assets invested in these ETFs grew faster yet, climbing to $80.8 billion from $3.7 billion over that same span.

Investors mulling ESG-intentional strategies are faced with a massive menu and a dizzying array of definitions, data, and research.

Four of Morningstar’s signature signals can help cut through this noise. But it is important to understand the questions each of them answers. Some are relevant to funds’ performance and investment merit and ignore ESG risk. Others measure the ESG risks funds face or how they incorporate ESG into their investment process. In this month’s cover story, I address each of these indicators in turn.

Here’s a rundown of what else you’ll find in this month’s issue:     

  • Is it good to be different? This month’s look at the ESG portfolio features a riff on the original that takes more active risk.
  • Spotlights on iShares ESG MSCI Emerging Markets Leaders ETF LDEM and Goldman Sachs JUST U.S. Large Cap ETF JUST.
  • ESG-intentional equity ETFs are commanding rich valuation multiples. Are these premiums justified? Are they structural? Or can be explained by cyclical factors?
  • ESG integration in bond funds is difficult. ESG-relevant data is often sparse and inconsistent. It also involves trade-offs. ESG integration introduces active risk that may or may not be rewarded. An examination of the menu of ESG-intentional bond ETFs illustrates these issues.

Ben

 
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