Picks reveal Morningstar’s thinking<\/p>\n
Fund committee replaces 2 of its 401(k) choices<\/p>\n
By HANK EZELL Cox News Service<\/p>\n
Sunday, August 10, 2003<\/p>\n
Atlanta — Morningstar, a well-known and widely quoted information company, is packed with bright young people who earn their daily bread analyzing mutual funds.<\/p>\n
Their information and insights are followed by hundreds of thousands of investors and money managers.<\/p>\n
It’s worth watching when the analysts select — from a universe of more than 11,000 mutual funds — the ones where they will invest their own daily bread.<\/p>\n
Morningstar’s 401(k) retirement plan offers 17 choices to the Chicago company’s several hundred employees. That array changed not too long ago, when the investment committee tossed out two name- brand funds and replaced them with similar, just-as-well-known funds.<\/p>\n
The Turner Midcap Growth fund replaced Morgan Stanley’s Institutional Mid Cap Growth fund. In the realm of emerging market funds, American Funds New World superseded Templeton Developing Markets.<\/p>\n
Morningstar’s selection committee makes its changes with reluctance.<\/p>\n
“These are supposed to be long-term holdings, after all,” writes senior analyst Emily Hall.<\/p>\n
Thus the reasons for those changes, and for the other 15 selections in the experts’ portfolio, offer lessons for investors everywhere:<\/p>\n
“Management interruptus” was the reason for rejecting the Morgan Stanley fund. “Lead manager Arden Armstrong left the firm last year to start her own hedge fund. . . . The true appeal of this aggressive offering was Armstrong’s stunning record,” Hall noted.<\/p>\n
The Turner replacement offers a solid track record, stable management and an “appealingly small” asset base, she added.<\/p>\n
High costs were the reason for axing Templeton. “The fund’s sizable expense ratio was a real turnoff,” in Hall’s recounting. “In addition, the fund’s deep-value approach led to a fairly streaky record.”<\/p>\n
The New World fund also invests in emerging markets but with a few twists. It lists bonds as well as stocks. Part of its assets go into U.S. and European companies that do business in emerging markets.<\/p>\n
“That unusual portfolio should help temper volatility over the long haul — an appealing thought in an incredibly bumpy asset class,” Hall writes.<\/p>\n","protected":false},"excerpt":{"rendered":"
Picks reveal Morningstar’s thinking Fund committee replaces 2 of its 401(k) choices By HANK EZELL Cox News Service Sunday, August 10, 2003 Atlanta — Morningstar, a well-known and widely quoted information company, is packed with bright young people who earn […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-719","post","type-post","status-publish","format-standard","hentry","category-hedgeco-news"],"_links":{"self":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/719","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/comments?post=719"}],"version-history":[{"count":0,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/719\/revisions"}],"wp:attachment":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/media?parent=719"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/categories?post=719"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/tags?post=719"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}