Morningstar Advisor - February/March 2011 - (Page 74)

By the Numbers: ETFs 50 Most-Popular Equity ETFs Morningstar’s analysis of exchange-traded funds now harnesses the rigorous, bottom-up research that our 100-plus equity analysts conduct in order to estimate the fair value of stock ETFs. By comparing our fair value estimate for an ETF’s portfolio with the fund’s market price, we can better gauge whether an ETF is cheap, dear, or reasonably priced. In so doing, we can help you profit from inviting opportunities as they arise. The table lists the 50 most popular equity ETFs, ranked by assets under management. A Morningstar Valuation Rating of Undervalued means the ETF is trading at a significant discount to our estimate of its intrinsic worth. A rating of Overvalued means the ETF is trading at a significant premium to our fair value estimate. We rate Fairly Valued any ETF that trades in between. The fair value estimate is the aggregate, asset-weighted fair value of the stocks in an ETF portfolio that are under coverage by Morningstar equity analysts, divided by the ETF’s shares outstanding. Depending on the coverage rate, the fair value estimate may not include all of the stocks in the portfolio. As such, when calculating our estimate, we assume that all stocks not under coverage are trading at fair value. Morningstar’s exchange-traded securities team analyzes the fundamental attractiveness of hundreds of ETFs. Our extensive ETF research is available in Morningstar Principia, Office, and our new Analyst Research Centers. Name Morningstar Category Style Box Morningstar Rating SPDR S&P 500 SPY iShares MSCI Emerging Markets Index EEM Vanguard Emerging Markets Stock ETF VWO iShares MSCI EAFE Index EFA iShares S&P 500 Index IVV PowerShares QQQ QQQQ Vanguard Total Stock Market ETF VTI iShares Russell 2000 Index IWM iShares Russell 1000 Growth Index IWF SPDR S&P MidCap 400 MDY iShares MSCI Brazil Index EWZ iShares Russell 1000 Value Index IWD iShares S&P MidCap 400 Index IJH SPDR Dow Jones Industrial Average DIA Energy Select Sector SPDR XLE iShares FTSE China 25 Index Fund FXI Financial Select Sector SPDR XLF Market Vectors Gold Miners ETF GDX Vanguard REIT Index ETF VNQ iShares S&P SmallCap 600 Index IJR Vanguard FTSE All-World ex-US ETF VEU iShares Russell 1000 Index IWB iShares Russell Midcap Index IWR iShares Dow Jones Select Dividend Index DVY Technology Select Sector SPDR XLK iShares S&P 500 Growth Index IVW Vanguard Europe Pacific ETF VEA Vanguard Growth ETF VUG SPDR S&P Dividend SDY iShares MSCI Japan Index EWJ Vanguard Small Cap ETF VB iShares Russell 2000 Value Index IWN iShares MSCI Canada Index EWC Vanguard Dividend Appreciation ETF VIG iShares MSCI Pacific ex-Japan EPP Vanguard Value ETF VTV iShares MSCI South Korea Index EWY iShares S&P 500 Value Index IVE iShares Russell 2000 Growth Index IWO Industrial Select Sector SPDR XLI Utilities Select Sector SPDR XLU iShares MSCI Taiwan Index EWT Oil Services HOLDRs OIH iShares S&P Latin America 40 Index ILF Vanguard Mid-Cap ETF VO iShares Russell 3000 Index IWV Rydex S&P Equal Weight RSP iShares Russell Midcap Growth Index IWP iShares Russell Midcap Value Index IWS iShares Dow Jones US Real Estate IYR Data as of December 31, 2010 Large Blend Diversified Emerging Mkts Diversified Emerging Mkts Foreign Large Blend Large Blend Large Growth Large Blend Small Blend Large Growth Mid-Cap Blend Latin America Stock Large Value Mid-Cap Blend Large Value Equity Energy China Region Financial Equity Precious Metals Real Estate Small Blend Foreign Large Blend Large Blend Mid-Cap Blend Large Value Technology Large Growth Foreign Large Blend Large Growth Large Value Japan Stock Small Blend Small Value Foreign Large Value Large Blend Pacific/Asia ex-Japan Stk Large Value Pacific/Asia ex-Japan Stk Large Value Small Growth Industrials Utilities China Region Equity Energy Latin America Stock Mid-Cap Blend Large Blend Large Blend Mid-Cap Growth Mid-Cap Value Real Estate È È È È È É È Î É Ë Ç Ç Ë È Ç Ç Ç É Ë Î È È Ë Ê É É È É Ç È Î Í È È È Ç Ç Ç Ï È Ç Ç É Ç Ë È È Ì Ê Ë ÙÙÙ ÙÙÙÙ ÙÙÙÙ ÙÙÙ ÙÙÙ ÙÙÙ ÙÙÙÙ ÙÙÙ ÙÙÙ ÙÙÙÙ ÙÙÙ ÙÙÙ ÙÙÙÙ ÙÙÙÙ ÙÙÙÙ ÙÙ Ù ÙÙ ÙÙÙ ÙÙÙ ÙÙÙ ÙÙÙ ÙÙÙ ÙÙ ÙÙÙ ÙÙÙÙ ÙÙÙ ÙÙÙÙ ÙÙÙÙ ÙÙÙÙ ÙÙÙ ÙÙÙ ÙÙÙÙÙ ÙÙÙÙÙ ÙÙÙ ÙÙÙ ÙÙ ÙÙ ÙÙÙ ÙÙ ÙÙÙ ÙÙ — ÙÙÙÙÙ ÙÙÙ ÙÙÙ ÙÙÙÙ ÙÙÙ ÙÙÙ ÙÙÙ 74 Morningstar Advisor February/March 2011

Table of Contents for the Digital Edition of Morningstar Advisor - February/March 2011

Morningstar Advisor - February/March 2011
Letter From the Editor
First, Do No Harm
Do You Use Active or Passive Investment Strategies?
Best of Both Worlds
How to Build an Index
Accountable Investor
Nice Guys Finish First
Four Picks for the Present
Investment Briefs
A New Guardrail Against Risk
Tech Loosens the Purse Strings (a Bit)
It’s More About Costs Than Active or Passive
Play Your Stars
In Between Active and Passive
Selling Beta as Alpha
The Weighting Game, and Other Puzzles of Indexing
Leaving the Nest
Redefining Credit Risk
Another Vote for Market-Based Credit-Risk Measures
Big Opportunities in Small-Cap Stocks
Benchmarks? What Benchmarks?
Mutual Fund Analyst Picks
50 Most Popular ETFs
Undervalued Stocks With Wide Moats
VA Sales Slide, but Assets on the Rise
Indexing’s Lunatic Fringe

Morningstar Advisor - February/March 2011