Morningstar Advisor - Fall 2007 - (Page 64)

Investments á la Carte Buying Protection Fourteen picks that should help guard a portfolio against a crumbling market. Value MF Van Kampen American Franchise Absolute-minded approach will hold up well in tough times. Manager steers fund away from speculative fare and toward firms with healthy free cash flow. Restructuring plan under way to shrink the firm’s global footprint and refocus core superstores. Healthy dividend provides some comfort. Managers look for financially strong firms trading at a discount. Low-turnover strategy has paid off over the years, especially in down markets. This fund’s concentrated portfolio has done well in tough markets. Only considers firms with 10% return on equity for the past 10 years. Eye-popping yield is only part of the firm’s allure. REIT tax benefits, conservative capitalization, and solid fundamentals make for a solid business. Offering has outperformed in buoyant markets and held up well in downturns. All-cap strategy combines growth and value elements. Manager’s focus on margin of safety keeps a lid on convertible securities’ inherent risks. Structure, pricing, and credit quality also important. Fund boasts one of the fattest payouts among equity ETFs, providing downside cushion. Subprime woes present opportunity for bargain-hunters. Firm’s moat stems from large asset base, allowing it to supply a full suite of services. Barnett Shale assets should drive growth. Fund’s global strategy and uncommon approach is tempered by strict value discipline and diversification. Did well in early-2000s bear market. Dividend-focused methodology avoids market turbulence and signals financial strength, but creates a bias toward financial stocks and European names. Dividend yield and free cash flow put the firm in an enviable position. Service offerings and customer ties offer ballast against deregulation. Preferred-stock ETF focused on financials. Downside potential likely less severe than common-stock sector funds thanks in part to ample dividend. Experienced managers’ bottom-up strategy focuses on strong balance sheets and steady earnings. Narrow focus means low correlation with S&P 500. S Borders Group SA Fenimore Asset Management Value Product Growth MF Jensen Fund S CapitalSource SA Manning & Napier Core Equity Income MF Vanguard Convertible Securities E KBW Bank ETF S Crosstex Energy, L.P. International MF Mutual Qualified E WisdomTree International Large Cap S Telecom Corporation of New Zealand Alternative E PowerShares Financial Preferred SA W.H Reaves Utility/Energy Equity The Analysts MF S Karen Dolan, CFA, Mutual Funds Jeffrey Ptak, CPA, CFA, Stocks E SA Sonya Morris, ETFs Michael Breen, Separate Accounts 64 Morningstar Advisor Fall 2007

Table of Contents Feed for the Digital Edition of Morningstar Advisor - Fall 2007

Morningstar Advisor Fall 2007 Features Departments Letter from the Editor Inbox 10 Years After: Developing Markets Make Progress Research Briefs Investors Should Adjust Their Home Bias Few Mutual Funds Exhibit Serial Correlation Valuating ETFs, the Equity Analyst's Way It’s All About Location See the World (Differently) The Return of the Global Flexible Investor Map of International Value Sound as a Loonie? Fair Exchange In Their Own Worlds A Good Read Putting Their Heads Together Buying Protection Scoping Out Easy-to-Use Funds Finding Good Stewards Consumer Firms Go Global Mutual Fund Analyst Picks Undervalued Stocks Most Popular Variable Annuities New at Morningstar The Whole Wide World

Morningstar Advisor - Fall 2007

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