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Investing Specialists

Morningstar Runs the Numbers

We take a numerical look through this week's Morningstar research. Plus, our most popular articles and videos for the week ended June 23.

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Inspired by Harper's Index (with a tip of the hat to FiveThirtyEight's Significant Digits blog), Morningstar Runs the Numbers uses a numbers-based approach to highlight recent Morningstar research, along with some outside news stories.

1.26%, 6.54%
That's the amount the MSCI All-Countries World Index ex-US returned in unhedged (in foreign currency) and hedged (to U.S. dollars) terms, respectively. When return differences are that stark, it can be tempting to think that hedging is the way forward, said director of equity ratings Tom Whitelaw. However, he notes there are many arguments for keeping your international-stock exposure unhedged.

$13.7 billion
Amazon's $13.7 billion acquisition of  Whole Foods Market (WFM) marks its most significant push into the grocery category, but it likely left some investors scratching their heads after more than two decades of building an e-commerce empire without physical stores. But consumer strategist R.J. Hottovy sees several reasons why this acquisition is more than just a push into the grocery category; in fact, he believes it can enhance Amazon's wide moat.

"While Whole Foods represents a major shift in Amazon's retail strategies, we believe it could make Amazon even more integral in consumers' lives--bolstering its network effect in the process--while becoming a major headache for other retailers."

In less than two decades, more than half of all publicly traded companies have disappeared, said Jason Zweig in The Wall Street Journal article "Stock Picking Is Dying Because There Are No More Stocks to Pick" (subscription required). The upshot of the shrinking universe of stocks that active stock pickers have a smaller opportunity set, so more money chases fewer stocks (sometimes regardless of valuation). 

"There were 7,355 U.S. stocks in November 1997, according to the Center for Research in Security Prices at the University of Chicago's Booth School of Business. Nowadays, there are fewer than 3,600."

In June, the Morningstar Wide Moat Focus Index swapped out six stock positions. Two asset managers,  T. Rowe Price Group (TROW) and  BlackRock (BLK), were among the undervalued firms with competitive advantages added to the index. On the flip side, some real estate stocks were removed after their prices had run up, including  Jones Lang LaSalle (JLL) and  CBRE Group (CBG).

It wasn't that long ago that virtually all of the sustainable investing options available to retail investors were actively managed, says senior manager research analyst David Kathman. But as money continues to flow into passive funds at the expense of active funds, more passive ESG offerings have become available to investors. This article lists the 10 largest passive funds by assets that have launched recently and have an ESG mandate.

Many people are hurtling toward a retirement shortfall, says director of personal finance Christine Benz. In this article, she offers seven suggestions for modest changes around the margins of a retirement plan that can help investors get back on track. 

"Rather than looking to a single blockbuster solution to help make up for a savings gap, what if you were to consider a little bit of several prudent strategies--being willing to cut your standard of living a bit in retirement, working a bit longer, and investing a bit better, for example? The virtue of taking several small steps--rather than relying on a single Hail Mary action--is that if one of the variables doesn't play out as you thought it would, you may still be able to save your plan. 

Most Popular Articles, Videos, and Securities

Most Popular Articles 

Most Popular Videos  

Most Requested Stock Quotes

 Most Requested Stock Analyses
Advance Auto Parts
Chicago Bridge & Iron

Most Requested Fund Quotes
Vanguard 500 Index Investor Fund 
Fidelity Contrafund Fund
Vanguard Wellesley Income Inv Fund
Vanguard Dividend Growth Inv Fund 
Vanguard Total Stock Market Index

 Most Requested Fund Analyses
Vanguard Market Neutral I
T. Rowe Price Global Technology
American Funds Capital World Growth and Income
Oakmark International Investor
FPA Crescent

Most Requested ETF Quotes
Vanguard S&P 500 ETF
Vanguard Total Stock Market ETF
PowerShares QQQ ETF 
Vanguard Dividend Appreciation ETF

 Most Requested ETF Analyses
Vanguard FTSE Emerging Markets ETF
Vanguard Dividend Appreciation ETF
Vanguard High Dividend Yield ETF
Vanguard FTSE Europe ETF
Vanguard Total Stock Market ETF does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.