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About
ETF Portfolios

Morningstar's ETF Model Portfolios are a series of diversified, model portfolios that use a passive investment framework to offer low-cost market exposure via exchange traded funds (ETFs). Asset allocations have been devised using Morningstar's strategic asset allocation framework and long-term capital market assumptions. ETF selection relies on Morningstar's qualitative and quantitative ETF research.

 

Date Title
30 Jun 2017 Morningstar ETF Model Portfolios: Q2 2017
31 Mar 2017 Morningstar ETF Model Portfolios: Q1 2017

 

Key benefits of the Morningstar ETF Model Portfolios

  • They provide investors with a template that offers diversification by individual security, sector, asset class and ETF provider;
  • Ongoing monitoring of portfolio asset allocation and constituents;
  • Formal performance updates provided on a quarterly basis;
  • Detailed research reports available on individual ETFs;
  • In addition to ongoing review, the models are re-assessed in the event of changes to the underlying ETFs, indices, investment processes, or other material events.

Each of the Morningstar ETF Model Portfolios aims to be appropriately diversified by manager and asset class while adhering to a long-term strategic asset allocation setting.

Asset allocations have been devised using Morningstar’s strategic asset allocation framework and long-term capital market assumptions.

ETF selection relies on Morningstar’s qualitative and quantitative ETF research. Our qualitative research is comprehensive and forward-looking, giving us a better indication about an ETF’s expected behaviour and longevity.

ETF Model Portfolio methodology

The Morningstar ETF Model Portfolios are constructed using the risk and return attributes of the Morningstar Risk Profiles. Underpinning these attributes is a set of investment objectives and time horizons that differentiate the three model portfolios across the risk/return spectrum. Each of the Morningstar ETF Model Portfolios aims to be appropriately diversified by ETF issuer and asset class while adhering to a long-term strategic asset allocation setting. This setting has been devised using Morningstar’s strategic asset allocation framework and long-term capital market assumptions. The investment objective, suggested time horizon and strategic asset allocation for each model portfolio is set out below.

 

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How is the Morningstar ETF Model Portfolios’ performance calculated?

Performance results represent modelled performance only. Past performance of any investment is not a reliable indicator of future performance and the performance described here is of a theoretical model. The model performance will differ from actual performance which follows that model depending on actual transaction fees, taxes and other factors including transaction timing and divergence from constituent weightings, rounding adjustments and minimum trade sizes.

Performance of the Morningstar ETF Model Portfolios is expressed on the following basis:

  • before deduction of transaction costs or fees (i.e. brokerage fees or bid/ask spreads) and taxes payable;
  • without allowing for franking credits; and;
  • income and distributions that would notionally be received are theoretically reinvested without any tax deduction.

How is the individual holding’s performance calculated?

Morningstar calculates the performance on the following basis:

  • before transaction costs or fees (i.e. brokerage fees or bid/ask spreads) and taxes payable;
  • income and distributions received during the period are reinvested without any tax deduction.