The high-yield bond market poses unique challenges to index funds that make an active approach more attractive.
Investors buying funds that target factors like momentum or value should understand the impact industry tilts have had on performance, says Morningstar's Alex Bryan.
Vanguard Small Cap Value ETF uses an approach that promotes low turnover and diversifies risk.
The firm fortifies its investment team and risk management culture but sticks to its core knitting, warranting a Parent rating upgrade.
Morningstar's Alex Bryan walks investors through some of the pros and cons of index-based ETFs versus actively managed funds in the high-yield bond category.
Bronze-rated Schwab Fundamental U.S. Small Company ETF attempts to profit from mean-reversion in valuations among small-cap stocks.
Industry tilts appear to pay off for momentum but are not integral to the success of value and low-volatility strategies.
This fund should hold up better than most of its peers during market downturns.
Low-volatility strategies tend to be more sensitive to fluctuating interest rates than the broad market.
This compelling exchange-traded fund has a new benchmark and price tag.
The returns of factor investment strategies often look more impressive in academia than in practice.
Interest-rate sensitivity is part of the risk with low-volatility strategies, but attractive risk-adjusted performance over the long term may make them worthwhile for some investors.
This distinctive strategy has a strong record, but its high turnover, fee, and myopic selection criterion detract from its appeal.
High-dividend-paying stocks tend to be more sensitive to interest rates than their lower-yielding counterparts, but not for the reason you might think.
This exchange-traded fund filters out some distressed stocks, but there are cheaper alternatives.
Finding an index that scores well across these six dimensions can help investors choose among seemingly similar funds.
From Fama-French to profitability and momentum, Morningstar's Alex Bryan looks at how academic research performs in investment products.
While this natural-resources ETF isn't for the faint of heart, it can offer good diversification benefits.
It may be tempting to time factor strategies, but sticking with a fixed plan is probably a better course of action.
An index should not only be representative of the style it's trying to capture, it should also be transparent and limit unnecessary turnover, says Morningstar's Alex Bryan.
This ETF takes less credit risk than most of its peers, so it offers a lower yield, but its cost advantage gives it a durable edge.
Momentum is so pervasive that it appears among both individual securities and entire indexes.
For most investors, it pays to maintain a static allocation to factors and be broadly diversified, says Morningstar's Alex Bryan.
This multifactor ETF won't shoot the lights out, but it has a good chance to slightly outperform the S&P 500 over the long term.
While it may be intuitive to presume strong economic growth translates into strong stock market performance, the evidence suggests otherwise.
This ETF targets high-dividend payers that have offered a fairly smooth ride.
Research by Morningstar's Alex Bryan shows how pervasive the effect is, and he offers tips on implementing the strategy and some products that help harness momentum.
The case for index investing rests on the index fund's cost advantage and how representative it is of its actively managed peers, not market efficiency.
This is one of the cheapest and most comprehensive Europe-stock funds available.
They're only meant to be a one-day holding, and during that period you're just guessing.
A sizable cost advantage, low turnover, and well-diversified portfolio make Vanguard Value ETF one of the better options in the category.
Low-volatility strategies have a role to play, but investors shouldn't expect to get higher long-run returns by taking on less risk, says Vanguard's John Ameriks.
Currency-hedging and low-volatility approaches might make it easier to stick with international stocks over the long haul.
Active outperformance isn't easy in any market but stands a better chance when fees are low.
This ETF is a bargain for investors who want exposure to profitable companies with durable competitive advantages.
A portfolio of low-cost index funds isn't a bad starting point for the average investor.
This Dow Jones Industrial Average tracker has an odd weighting scheme that limits its appeal.
A new crop of rules-based bond ETFs is attempting to improve on traditional market-cap-weighted alternatives.
This ETF's significant cost advantage should translate into attractive category-relative performance.
Performance tends to persist in the short run, but betting on long-term losers can be a winning strategy.
Long-term growth in global food consumption should benefit this fund's holdings, but investors should be prepared for a bumpy ride.
ESG index strategies can be effective tools for values-based investing, but they may introduce some additional bets that investors may not intend to make.
Non-market-cap-weighted strategies may have higher return and yield potential, but beware of taking on more volatility and risk.
This low-cost exchange-traded fund offers an attractive yield while diversifying risk.
Dividend strategies can look and behave differently from one another depending on how they manage the trade-off between income and dividend growth.
This international-stock ETF places currency bets in an attempt to enhance performance.
Though more durable than some other bond types during periods of rising rates, senior loans carry credit and liquidity risk, says Morningstar's Alex Bryan.
This low-volatility ETF should give international-stock investors a smoother ride and better downside protection.
These investments offer attractive yields and can hold up well when interest rates rise, but they come with considerable credit and liquidity risk.
Risk-averse small-cap investors can feel good about Royce Special Equity under Charlie Driefus, says Morningstar's Alex Bryan.