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

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

This month’s issue explores the topic of diversification within stock portfolios. In this month’s cover, I dig in on the features of one of the most popular means of achieving diversified exposure to the stock market: market-capitalization-weighted indexing.

Market-capitalization-weighted indexing is a great strategy for many investors. But like any great strategy, it has experienced and will continue to experience periods where it looks like a bad idea. I look at what makes cap weighting a sensible approach to building a stock portfolio and why its greatest strength can also be its greatest weakness. Given that we’ve lived through a decade-long stretch where cap weighting has looked and felt brilliant, my hope is that this piece helps prepare disciples of owning the market to sit tight the next time it next looks and feels dimwitted.

Also in this issue:

• I share a summary of the results of the midyear 2018 installment of the Morningstar Active/Passive Barometer.
• I look at 2018’s most successful newly-launched exchange-traded products and the common elements driving their growth.
• Alex Bryan discusses how most stocks stink and the implications for portfolio construction.
• Daniel Sotiroff examines diversification within the context of low-volatility stock portfolios.
• Alex profiles Nationwide Maximum Diversification U.S. Core Equity ETF MXDU
• Adam McCullough shares his analysis of Invesco S&P 500 Equal Weight ETF RSP, which carries a Morningstar Analyst Rating of Bronze.
• In this month's Sector Snapshot, I share our equity analysts’ take on the stocks that moved the market in June.

http://etf.morningstar.com/Newsletter.aspx?download=currentIssue

Best,

Ben Johnson, CFA