The PDF version of the September 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, we put ETFs under the microscope, examining index construction, exploring how to maximize the yield from their dividends, and digging into the different ways that ETF portfolio managers try to minimize costs and maximize returns.

Index methodologies are index funds’ DNA. They are the instructions that dictate out how indexes—and by extension index funds—select and weight their constituents. They impose constraints. They put in parameters for regular upkeep. Index methodologies define the makeup of an index fund’s portfolio, its return potential, and its risk. In this month’s cover, I discuss where index construction ranks in Morningstar’s ratings process, share a template for decoding index funds’ DNA, and list some of the traits of the best indexes.

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

• This month’s adjusted Factor portfolio takes a backdoor approach to targeting factors.
• Spotlights on Vanguard FTSE All-World ex U.S. Small Cap ETF VSS and iShares Russell 200 ETF IWM.
• Daniel Sotiroff discusses qualified dividend income and how investors can get the greatest after-tax yields from their ETFs’ dividends.
• Lan Anh Tran digs into the different ways that ETF portfolio managers try to eke out every last basis point of performance on investors’ behalf.

Best,

Ben