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 Sept. 14.
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.
Susan Dziubinski surveyed Morningstar's Global ex-US Moat Focus index to week to find 10 foreign stocks that are both inexpensive and high quality. Top ideas included Vodafone (VOD) and Credit Suisse (CS).
Amassing $1 million in your 401(k) may seem like an unattainable goal to investors just starting out. But Russ Kinnel discussed how the milestone shouldn't be seen as either demoralizing or that it is necessary to take on big risks to reach that level.
The Bloomberg Barclays U.S. Aggregate Bond Index is down 1.4% in 2018 as interest rates have moved higher. This has kept interest-rate risk top of mind, but Morningstar's Eric Jacobson warns that using duration to understand that risk is not a straightforward proposition. He lays out four ways to use it with care, including:
Duration is an estimate. It's designed to help you gauge how much a bond's price is likely to rise or fall given a sudden change in market yields. The last part is important because the number gets less and less meaningful the longer the time between yield measurements. Even under relatively "normal" conditions, though, a bond's price may not move exactly as its duration predicts.
August was a busy month for Morningstar's manager research team. More than 100 funds saw their ratings affirmed (along with two target-date series, three were downgraded, and 10 saw a ratings upgrade). One of the highlights was PIMCO StocksPLUS Small (PSCSX) being moved into medalist territory as its rating was bumped to Bronze from Neutral.
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