Morningstar ETF Reports Improving... A Bit (ETF: IYE)

Nov.17.05 | About: iShares U.S. (IYE)

Roger Nusbaum (wish list) submits: I pick on Morningstar a lot for the ETF reports. I have been critical of their lack of forward looking analysis and their persistent open end fund way of looking at ETFs (which don't lend themselves to that type of study).

Well I have to give credit where it is due, as change may be afoot. There is a report up (sub. req.) about the iShares US Energy (NYSEARCA:IYE).

The report offers a little more than most of the others I have read from Morningstar. There is a little forward looking analysis that questions whether everything that can go right for the sector is already priced in based on fundamentals. Fair question.

There is a mention of volatility and a look under the hood to address concentration and (this is big) an acknowledgement that IYE or another energy ETF might have a place in a diversified portfolio.

OK, guys almost there. Some opinions about oil, the commodity, with a little something to support it would be useful. Perhaps an opinion about how much they think is right for the equity portion of a portfolio would help readers too.

Every report they do about ETFs contains the same paragraph under risks about having to pay commission to trade ETFs. This is a risk? Really? If that is a risk why isn't the fact that investors are stuck in an OEF until after the close contained on every single OEF report they do? Isn't that more of a risk than having to pay a $15 commission? Seriously.

That aside I think this report is a step closer to being useful.