Morningstar Advisor - Winter 2008 - (Page 70) Investments á la Carte Focus on Financials Thirteen picks that should help guard a portfolio against a crumbling market. Growth MF Baron Partners BPTRX The REITs that Ron Baron owns here have had a tough year, but previous picks show his skill at recognizing winners early on. Its low attrition rate, the Pulse network, and third-party partnerships give Discover some tough-to-copy advantages. Its holding of boutique firm Thomas Weisel Partners Group typifies this separate account’s attitude toward financials. Contrarian tendencies mean that this fund’s stock manager has plenty of options for bargain-hunting. Solid dividend performance makes this firm a solid choice for income-seekers. In addition to an eye-catching yield, this ETF has a high-quality portfolio and looks cheap, to boot. Wally Weitz’s contrarianism has led him toward where he see the most value, and right now that’s housing-ralated fare. Its recent purchases of PMI Group and MGIC stock means that Old Republic now represents a “double dip” for investors. David Dreman’s team has been buying hard-hit financials, and while tactic this has yet to pay off, we’re not worried. Plays on emerging economies, namely China’s, make this fund stand out, but volatility is an issue. Solid returns, new profitability goals, and positive changes in its retail banking unit have Deutsche Bank on the right path. This ETF isn’t perfect, and it isn’t a pure international play, but it’s convenient and inexpensive. Non-U.S. financials are the bread and butter of this dividendweighted ETF. S Discover Financial Services DFS SA Baron Small Cap Equity Income MF Templeton Income TINCX S Allied Capital ALD E Financials Select Sector SPDR XLF Value MF Weitz Value WVALX S Old Republic ORI SA Dreman Large Cap Value International MF Artisan International Small Cap ARTJX S Deutsche Bank E iShares S&P Global Financials IXG E WisdomTree International Financial DRF The Analysts MF S Karen Dolan, CFA, Mutual Funds Justin Fuller, Stocks E SA Jeffrey Ptak, CPA, CFA, ETFs Michael Breen, Separate Accounts 70 Morningstar Advisor Winter 2008
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