Morningstar Investment Services on Thursday launched the Contrarian ETF strategies, a group of three exchange-traded-fund portfolios that provide exposure to the “most unloved” mutual-fund categories in Morningstar’s database, as measured by asset outflows.
The fee-based discretionary investment management program is offered solely through financial advisors, according to Morningstar’s news release.
The Contrarian ETF portfolios build on Morningstar “Buy the Unloved” study, which examines the predictive value of mutual-fund asset flows. The study, first published in 1994 and updated annually, has found that unpopular categories are more likely to outperform the broad stock market over subsequent periods than popular categories, suggesting that outflows are a useful contrarian signal.