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Quarter-End Insights

Morningstar's Take on the Fourth Quarter

Our analysis of the fourth quarter in stocks and funds.

As 2020 comes to a close, Morningstar's analysts have provided in-depth reviews and outlooks across equity sectors and fund categories. 

Equities

Quarterly Market Outlook: Opportunities in Value and Energy Stocks
The broad equity market is trading at a 6% premium to our fair value estimates.

2020 Market Performance in 7 Charts
We take a closer look at the stock and bond markets in Q4 and more.

Economic Outlook: We Remain Optimistic for a Rapid Recovery
A lot is riding on the coronavirus vaccine.

33 Undervalued Stocks for 2021
Here are our analysts' top ideas in each sector for the new year.

Healthcare: In Healthcare, Drugmakers and Managed-Care Firms Look Attractive
We don't expect major policy reforms now that the dust has settled on the elections.

Utilities: Clean Energy Provides Growth in Utilities Sector
We expect the incoming Biden administration to speed up investment in renewable energy.

Basic Materials: Agriculture, Chemicals Appeal in Basic Materials
We expect potash demand to grow over the next several years in basic materials.

Communication Services: Even Regulators Can't Slow the Momentum of Online Media Giants
Market seems focused on the rebound in online advertising demand.

Energy: Energy Remains the Most Undervalued Sector
We expect a nearly complete recovery in crude demand as the pandemic subsides in 2021.

Consumer Defensive: Bargains Scant in Consumer Defensive Sector
Alcohol and tobacco still present the biggest opportunities.

Technology: 3 Undervalued Tech Stocks
Look beyond the tech giants for hidden opportunities.

Financial Services: Outlook Improved but Still Overpriced
Most financial stocks are trading above our fair value estimates.

Industrials: Outside of Aerospace and Defense, Few Undervalued Industrials Stocks
Incoming administration could be a boon for infrastructure spending.

Real Estate: We Expect Malls and Hotels to Rebound
We believe most REITs will continue to pay dividends, making their increased yields attractive to investors.

Consumer Cyclical: Limited Opportunities in Consumer Cyclical
Aside from auto and restaurant subindustries, the sector looks fully valued.

Consumer Defensive: How Has the Consumer Equity Sector Handled the Pandemic?
And one stock we like.

Technology: The Tech Sector Soars in 2020
But there are still a few bargains to be had.

Healthcare: Coronavirus at Center Stage
And some undervalued stocks that capture our attention.

Energy: What We Expect From Oil Prices
How the vaccine affects this sector, and two of our top picks.

The Outlook for Dividends
Dividend investors had a hard time in 2020, but Morningstar analyst Dan Lefkovitz think the outlook is brighter for the year ahead.

Dividend Picks for 2021
We spot opportunities in consumer staples, utilities, and energy.

Funds

2020: The Year in ETFs
We’ve reached a tipping point in the balance between mutual funds and ETFs.

2020: The Year in Bond Funds
Bond markets overcome a turbulent year.

2020: The Year in Funds
Growth funds dominate, investors embrace bonds, and a terrific manager struggles.

2020 Year-End Wrap-Up: U.S. Equity Funds 
U.S equity markets rebound off first-quarter lows.

Sustainable Equity Funds Outperform Traditional Peers in 2020
A strong year for ESG equity index funds.

Wild Ride for International Equities in 2020
Investors looked past the pandemic’s near-term impact.

Download the quarter-end data.