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 Aug. 10.
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.
The costs of owning mutual funds/exchange-traded funds are well-specified. Auto manufacturers sticker cars with estimated fuel expenditures, and appliance dealers post anticipated energy consumption, but those are rough guesses. Actual expenses will vary widely by user. Whereas with funds, a shareholder's costs can generally be determined precisely, multiplying the expense ratio by the investment's size. Sometimes, however, the official numbers don't tell the complete story. Vice president of research John Rekenthaler discusses three exceptions.
Fifty-two percent of people turning 65 are expected to need long-term care during their lifetimes, says Christine Benz, Morningstar's director of personal finance. The prospect of needing long-term care is inherently unpleasant, and that care can also be expensive, running upward of $100,000 per year in urban areas. Benz discusses how heath savings accounts can be used to defray long-term care costs.
Taxicab licenses were once tightly controlled. New York City allowed exactly 13,637 licenses for taxicabs, for example. But now, Uber and Lyft have changed the game completely. New York became the first city to restrict the number of ride-hailing vehicles and to establish pay rules for drivers--another step no other major city has taken. This could provide a model for other governments that want to rein in the industry, according to The New York Times.
Stephen Ellis, a strategist covering energy and utilities stocks, discussed Morningstar equity analysts' natural gas liquid forecast, which is much higher than consensus estimates. The main drivers for our forecast are China and India. Ellis says China has significant demand for cleaner burning, more environmentally-centric feedstock, whereas India is also looking for similar attributes. He thinks these four firms are poised to benefit from this significant trend.
The Morningstar Exponential Technologies Index focuses on finding high-growth companies that are in the early stages of developing technologies that are expected to have a broad impact on society and transform how we live and work. We list the 10 cheapest high-quality wide-and narrow-moat stocks in the index currently, along with the main theme or themes they are expected to benefit from.
At Morningstar, we're fans of companies that have wide economic moats. Such high-quality firms have competitive advantages that allow them to effectively fight off competitors. These three funds pursue strategies targeting high-quality stocks and hold substantial positions in wide-moat names.
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