Read and review commentaries written by Morningstar experts. These observations and insights are specific to Exchange Traded Funds.
Momentum Often Loses Steam in Practice
Momentum may not work as well in practice as on paper, but well-constructed momentum funds still have a good chance to beat the market.
by Alex Bryan, CFA | 2020-10-20 04:00:00
A version of this article previously appeared in the August issue ofMorningstar ETFInvestor. Click here to download a complimentary copy.Momentum investing is sound in theory but often disappoints in practice. This strategy is based on the tendency for recent performance to persist in the short term. On paper, simple momentum strategies that target stocks with strong returns over the past year seem to work well. But they ignore real-world frictions, like trading costs and taxes, and often look quite different from momentum funds investors can buy.While momentum has continued to work on paper in recent years, most broad large- and mid-cap U.S. momentum funds have underperformed the Russell 1000 Growth Index. (This is an appropriate benchmark because most momentum funds … Full Story
A Silver-Rated ETF for Core Bond Exposure
Broad diversification and low costs make this fund a good option for core fixed-income exposure.
by Neal Kosciulek | 2020-09-24 04:00:00
Schwab U.S. Aggregate Bond ETF is a great selection as a core investment-grade bond fund, in large part because of its rock-bottom fee. Its conservative portfolio further sets it up for long-term success. It earns a Morningstar Analyst Rating of Silver.The strategy tracks the Bloomberg Barclays U.S. Aggregate Bond Index, which includes investment-grade U.S.-dollar-denominated bonds with at least one year until maturity. The index is weighted by market value, tilting the portfolio toward the largest, most liquid issues, which are easy to obtain and cheap to trade. This approach also harnesses the market's collective wisdom about the relative value of each security, which is a prudent approach for the long term. That said, bond-issuing activity influences the composition of this portfolio.The government is the largest debt issuer in t… Full Story
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ETFs: Commentary
Commentary
Read and review commentaries written by Morningstar experts. These observations and insights are specific to Exchange Traded Funds.
Momentum Often Loses Steam in Practice
Momentum may not work as well in practice as on paper, but well-constructed momentum funds still have a good chance to beat the market.
A Silver-Rated ETF for Core Bond Exposure
Broad diversification and low costs make this fund a good option for core fixed-income exposure.
Momentum Often Loses Steam in Practice
A Silver-Rated ETF for Core Bond Exposure
Sell Underperforming Funds With Large Personal Unrealized Capital Gains?
ETF Alternatives to Money Funds
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