Morningstar Advisor - October/November 2012 - (Page 76)

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 Vanguard MSCI Emerging Markets ETF VWO iShares MSCI EAFE Index EFA PowerShares QQQ QQQ iShares MSCI Emerging Markets Index EEM iShares S&P 500 Index IVV Vanguard Total Stock Market ETF VTI iShares Russell 2000 Index IWM iShares Russell 1000 Growth Index IWF Vanguard REIT Index ETF VNQ iShares Russell 1000 Value Index IWD iShares S&P MidCap 400 Index IJH Vanguard Dividend Appreciation ETF VIG SPDR Dow Jones Industrial Average DIA iShares Dow Jones Select Dividend Index DVY Technology Select Sector SPDR XLK SPDR S&P MidCap 400 MDY Vanguard MSCI EAFE ETF VEA SPDR S&P Dividend SDY Market Vectors Gold Miners ETF GDX Vanguard Growth ETF VUG iShares S&P SmallCap 600 Index IJR Energy Select Sector SPDR XLE iShares MSCI Brazil Index EWZ iShares S&P 500 Growth Index IVW Financial Select Sector SPDR XLF Vanguard FTSE All-World ex-US ETF VEU iShares Russell 1000 Index IWB Vanguard Value ETF VTV Utilities Select Sector SPDR XLU iShares Russell Midcap Index IWR Consumer Staples Select Sector SPDR XLP Market Vectors Agribusiness ETF MOO Vanguard S&P 500 ETF VOO JPMorgan Alerian MLP Index ETN AMJ Health Care Select Sector SPDR XLV iShares S&P 100 Index OEF iShares MSCI Japan Index EWJ iShares S&P 500 Value Index IVE Vanguard Small Cap ETF VB iShares MSCI Canada Index EWC iShares Dow Jones US Real Estate IYR iShares Russell 2000 Value Index IWN iShares FTSE China 25 Index Fund FXI WisdomTree Emerging Markets Equity Inc DEM ALPS Alerian MLP ETF AMLP Vanguard High Dividend Yield Indx ETF VYM iShares Russell 2000 Growth Index IWO Vanguard Mid-Cap ETF VO iShares Russell 3000 Index IWV Data as of Aug. 31, 2012 Large Blend Diversified Emerging Mkts Foreign Large Blend Large Growth Diversified Emerging Mkts Large Blend Large Blend Small Blend Large Growth Real Estate Large Value Mid-Cap Blend Large Blend Large Value Mid-Cap Value Technology Mid-Cap Blend Foreign Large Blend Large Value Equity Precious Metals Large Growth Small Blend Equity Energy Latin America Stock Large Growth Financial Foreign Large Blend Large Blend Large Value Utilities Mid-Cap Blend Consumer Defensive Natural Res Large Blend Equity Energy Health Large Blend Japan Stock Large Value Small Blend Foreign Large Value Real Estate Small Value China Region Diversified Emerging Mkts Equity Energy Large Value Small Growth Mid-Cap Blend Large Blend È È È É È È È Î É Ë Ç Ë È Ç Ê É Ë È Ç É É Î Ç È É Ç È È Ç Ç Ë È È È — È È È Ç Î È Ë Í Ç Ç Ê Ç Ï Ë È ÙÙÙÙ ÙÙÙ ÙÙÙ ÙÙÙÙÙ ÙÙÙÙ ÙÙÙÙ ÙÙÙÙ ÙÙÙ ÙÙÙÙ ÙÙÙ ÙÙÙ ÙÙÙÙ ÙÙÙÙÙ ÙÙÙÙÙ ÙÙÙÙ ÙÙÙÙ ÙÙÙÙ ÙÙÙ ÙÙÙÙÙ ÙÙÙ ÙÙÙÙ ÙÙÙÙ ÙÙÙÙÙ ÙÙ ÙÙÙÙÙ ÙÙ ÙÙÙ ÙÙÙÙ ÙÙÙ ÙÙÙ ÙÙÙÙ ÙÙÙÙ ÙÙÙÙÙ — ÙÙÙÙÙ ÙÙÙ ÙÙÙÙ ÙÙ ÙÙÙ ÙÙÙÙ ÙÙÙÙÙ ÙÙÙ ÙÙÙ ÙÙ ÙÙÙÙÙ — ÙÙÙÙ ÙÙÙ ÙÙÙ ÙÙÙÙ 76 Morningstar Advisor October/November 2012

Table of Contents for the Digital Edition of Morningstar Advisor - October/November 2012

Morningstar Advisor - October/November 2012
Letter From the Editor
Ill Communication
Do You Use Factor-Investing Strategies?
Practicing What She Preaches
How to Determine the True Price of ETFs
The Quant Factor
Managers Dispute the Death of Equities
Investments á la Carte
Investment Briefs
Five Inconvenient Truths of Manager Research
Health Care’s Outlook Clarifies
Exploring the World of Factors
Uncloaking the Alpha Machine
Factor Strategies Gain Footholds in Practices
Big Mo
Fitting Factors Into the Formula
Clients Have a Friend in Luther King
Less-Liquid Holdings Mean More-Solid Results
Retirement-Withdrawal Strategies Quantified
Amid Turmoil, Don’t Discount Foreign Equities
Our Favorite Mutual Funds
50 Most-Popular Equity ETFs
Undervalued Stocks With Wide Moats
Should I Stay or Should I Go?

Morningstar Advisor - October/November 2012