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Morningstar Introduces Rating for U.S. Exchange-Traded Funds (ETFs)

Morningstar, the investment research firm, announced Friday that it has launched a Morningstar Rating for exchange-traded funds (ETFs) based in the United States. The Morningstar Rating, often called the "star rating," may help investors and advisors compare the risk-adjusted returns of ETFs with other ETFs and similar open-end mutual funds. "Increasingly, investors are using exchange-traded funds as vehicles to help them implement their investment strategies," said Dan Culloton, senior mutual fund analyst at Morningstar. "By providing ratings on ETFs, we can help investors do their homework and better evaluate whether an ETF makes sense for their portfolios." ETFs are often compared with open-end index funds, and the rating provides an additional measure for comparing these investments. The Morningstar Rating for ETFs is derived by comparing each ETF to open-end mutual funds in the same Morningstar Category, or peer group. Morningstar is providing ratings for 107 ETFs; investors can find them on Morningstar.com.