Chuck Jaffe: Picking the right ETF or mutual fund is getting even easier

Investment researcher Morningstar Inc. is changing how it analyzes exchange-traded funds — and it’s as if Morningstar had decided that oranges have become apples.

The influential data/research powerhouse MORN, -1.64% announced last week that it would effectively regard ETFs same way it sizes up traditional mutual funds. That means adding forward-looking analyst ratings to ETFs, and commingling exchange-traded issues with traditional funds in the peer groups.

From a Morningstar research standpoint, ETFs were oranges and traditional funds were apples. Yet investors increasingly see ETFs and mutual funds as interchangeable, which is part of the reason for Morningstar to change its methods (it’s worth noting that some other research firms already measured traditional funds and ETFs in the same category).

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