Morningstar on ETFs (mentions IYH and IXJ)

The other day I stumbled across the Morningstar page that lists all their ETF reports, writes Roger Nusbaum.

I read through a couple of them and I'm not sure I understand exactly what the purpose is.

The reports don't focus on what I would expect them to focus on. There is a lot devoted to expense ratio comparison. This seems more like a detail for the end of the report than any type of real analysis. I looked at reports for two health ETFs; IYH and IXJ (subscription required). The analysts does not seem favorably disposed to either one yet there are no alternatives given as far as better performing OEFs or any other health care investment.

An approach that I think would be more useful would be an analysis of the sector itself. Maybe some process about why a sector should be overweight or underweight in a portfolio based on some historical precedent along with current events interpretation for some forward looking analysis. This could also be applied to the style ETFs and the cap size as well.

For the country ETFs, I have to think someone could study the goings on in the various countries represented and offer an opinion.

The other thing that I'd like to see is how good of a proxy an ETF is for its underlying index. Obviously this doesn't do much for an S+P 500 ETF but is, for example, iShares Spain a good proxy for the IBEX?

I try to offer the type of analysis I am saying Morningstar lacks but it would be nice to see more work like this from a two heads standpoint.

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