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Morningstar Begins Rating Exchange-Traded Funds

With assets in and the number of exchange-traded funds continuing to rise, Morningstar is now rating 107 ETFs on the market, based on their risk-adjusted returns in their respective peer groups, as well as their expense ratios. To be eligible for the ratings, which Morningstar is making available to investors at its website at no charge, the funds must be three years old. Thus, Morningstar is rating only 107 of the 201 ETFs sold in the U.S. The ratings are designed to help investors compare one ETF to another as well as to regular mutual funds.

"By providing ratings on ETFs, we can help investors do their homework and better evaluate whether an ETF makes sense for their portfolios," said Dan Culloton, senior mutual fund analyst at Morningstar.

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