Morningstar Advisor - Fall 2007 - (Page 7)

Letter from the Editor Globetrotting A tidy (and conventional) way to tackle such a broad subject as international investing— the subject of this issue’s Spotlight—would have been to organize the section by regions. Here’s Asia, here’s Europe, here’s Latin America. Or we could have sliced the globe into developing and emerging markets. Investing abroad, however, is a bit messier than that. And, more importantly, it doesn’t reflect how the top global investors are looking at the world. Today, it’s less about locale and more about sectors and industries—no matter where on the planet they are. Our Spotlight (page 26) portrays international investing in this light. We argue that in today’s world, where companies and economies are becoming intertwined, investors and advisors need to develop a new mindset. They should broaden their investment universe and be open to new opportunities wherever they might be found—whether in the United States or elsewhere. Ranji Nagaswami, the chief investment officer of AllianceBernstein, talked about this at the 2007 Morningstar Investment Conference. “Focusing on country is no longer a useful way to invest,” she said. “What you get paid for is stock and industry selection, not country of domicile. So when investors limit their international holdings to 10% or 15% of their portfolios, they’re not limiting risk; they’re simply limiting return opportunities.” To help you navigate this “fluid state of opportunities,” as Morningstar senior analyst Bridget Hughes calls it, we tapped nearly a dozen Morningstar equity and mutual fund analysts, based here and abroad, for their insights and ideas. We examine why it’s important to buy internationally and be a flexible global investor. We also take a look at who the best global investors are—successful managers who don’t restrict themselves to regions and go where the opportunities are. Finally, we discuss a key issue for U.S. investors who invest overseas: currency diversification. Speaking of great global investors, this issue’s Morningstar Conversation (page 49) is between two mavericks: Jean-Marie Eveillard of FirstEagle Funds and Marty Whitman of Third Avenue. For years, both of these managers have been making their shareholders lots of money with a flexible global mindset. They also know how to talk about investing in clear, concise—and colorful—ways. (Be sure to view video excerpts of their conversation at MorningstarAdvisor.com.) Other investors we think you should know are featured in Undiscovered Managers. Senior analyst Karen Dolan introduces you to Morgan Stanley’s Dennis Lynch, who encourages his team to take one day a month away from the office just to read and think (page 56). And you’ll want to read about Manning & Napier, a shop where no one goes it alone (page 60). The firm is run by a committee, senior analyst Michael Breen writes, and analysts must form partnerships with others before a pick is accepted into the portfolio. Also in these pages, you’ll find synopses of the latest Morningstar research in Gray Matters, and there are loads of ideas in Investments a la Carte, Screens, and By the Numbers. Our aim at Morningstar Advisor is to provide you with the best investment research and analysis available to help you make informed decisions for your clients. Please let me know if you think we’re meeting that standard. My address is magazine_editor@morningstar.com. Thanks for reading, and see you next quarter. MorningstarAdvisor.com 7 http://MorningstarAdvisor.com http://MorningstarAdvisor.com

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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