CHICAGO, Oct. 4, 2012 /PRNewswire/ -- Morningstar, Inc. (NASDAQ: MORN), a leading provider of independent investment research, today announced the winners of its inaugural Morningstar Awards for U.S. exchange-traded funds (ETFs and ETNs) and ETF providers at its third annual ETF Invest Conference in Chicago. The Morningstar Awards recognize the best ETF firms as well as Morningstar ETF Category Winners for retail and institutional investing objectives based on performance and cost.
The following providers were named the 2012 Morningstar Best ETF Providers in five U.S. broad asset classes:
- Commodities: iPath ETNs
- International Stock: iShares
- Sector Stock: Vanguard
- Taxable Bond: iShares
- U.S. Stock: Vanguard
"We're introducing ETF awards to help individual investors, advisors, and institutional investors identify ETFs with strong one- and three-year performance track records and reasonable costs," said Paul Justice, Morningstar's director of research for passive funds, North America. "While the awards take into account past results, performance is only part of the story. Costs are important to ETF investors, and the total cost of holding an ETF goes beyond simple expense ratios, which is why the awards also consider estimated holding costs and liquidity costs. Because performance can be fleeting, we emphasize cost analysis because fees have less variance year to year."
The new Morningstar Awards for ETFs and ETF providers consider the total cost of ETF ownership, based on an ETF's estimated holding cost, tracking volatility, and market impact cost; the ability of the ETF to track its index; and risk-adjusted returns. More information about Morningstar's data points for total cost analysis is available at http://advisor.morningstar.com/products/conference/brochure/ETF%20Total%20Cost%20Analysis.pdf.The quantitative methodology for the award also recognizes risk-adjusted outperformance within the context of a relevant peer group over the past one- and three-year periods.