Morningstar Advisor - June/July 2013 - (Page 19)

Closed-End Fund: AllianceBernstein Income ACG Earnings Rate (Share Price) 4.87% $16K 6-Mo Avg. Discount –8.2% Total Expense Ratio 0.64% AllianceBernstein Income Fund Common (Index) Barclays US Agg Bond TR USD (Index) 14 12 10 05/08 05/09 05/10 05/11 05/12 05/13 Effective Duration 9.2 years Any investor looking to make a tactical, long-duration bet should consider this fund. The 0.64% total expense ratio doesn’t appear too impressive at first glance, but shareholders get a lot of bang for their buck. Expenses are inclusive of the financing cost for the portfolio’s 1.47 leverage ratio (total assets/net assets). The fund’s persistent (and sizable) Leverage Ratio 1.47 Avg. Daily Volume $4.8 million discount gives an extra boost to income, making it an even better bargain. In all, investors can effectively purchase $1.60 in enterprise value for every $1 invested. Nevertheless, the portfolio’s long duration of 9.2 years—a side effect of its high long-dated Treasury exposure—means it isn’t for everyone. Steven Pikelny Exchange-Traded Fund: PowerShares International Dividend Achievers Portfolio PID 16000 Morningstar Category Foreign Large Value 14000 Expense Ratio 0.56% Total Assets US Agg Bond TR USD12-Mo Yield Barclays (Index) $836 million 2.43% AllianceBernstein Income Fund Common (Index) PowerShares Intl Dividend Achievers (Index) $16K 12000 MSCI EAFE NR USD (Index) 10000 10 8000 May-08Jan-09Sep-09May-10Jan-11Sep-11May-12Jan-13 Jun-08Feb-09Oct-09Jun-10Feb-11Oct-11Jun-12Feb-13 Jul-08 Mar-09Nov-09 Jul-10 Mar-11Nov-11 Jul-12 Mar-13 Aug-08Apr-09Dec-09Aug-10Apr-11Dec-11Aug-12Apr-13 Sep-08May-09Jan-10Sep-10May-11Jan-12Sep-12May-13 Oct-08Jun-09Feb-10Oct-10Jun-11Feb-12Oct-12 Nov-08 Jul-09 Mar-10Nov-10 Jul-11 Mar-12Nov-12 Dec-08Aug-09Apr-10Dec-10Aug-11Apr-12Dec-12 05/08 05/09 05/10 05/11 05/12 05/13 Morningstar Rating The rationale for domestic dividend investing also applies to the international market. This fund tracks the International Dividend Achievers Index, which selects companies that have increased their annual dividend for the past five years and weights constituents by dividend yield. With this screen, the fund avoids investing in highly distressed stock and has been significantly less volatile relative to other international dividend ETFs. While competing funds offer higher yields, PID’s risk-adjusted total return over the past five years was the highest in its peer group. Abby Woodham ARTGX emphasis on steady growers has paid off over the past year even in a strong market for stocks; it’s well ahead of its MSCI All Country World Index benchmark. A relatively MSCI EAFE NR USD (Index) hefty stake in energy firms and a modest weighting in financials has held back the usually strong Harris & Associates Equity & Income. Finally, Barclays S&P 500 Dynamic VEQTOR VQT was far too cautious over the past year. Greg Carlson QQQQQ Avg. Daily Volume 211,000 Hindsight: April/May 2012 Charles Schwab SCHW led the way for our four picks from a year ago, trouncing the S&P 500 Index as rising asset-management and administrative fees made up for declining trade 16000 volumes. Meanwhile, Artisan Global Value’s Pick PowerShares Intl Dividend Achievers (Index) Type Cum Rtn to Date (%) Back Then, We Said ... Now, We Say ... Charles Schwab Corp SCHW S 25.18 “Strong position in personal-investing business…” “Weakened interest-rate conditions constraining profits…” Artisan Global Value Investor ARTGX MF 18.50 “Moving further up the quality spectrum…” “Unexpectedly thriving in a bullish environment…” Harris & Associates Equity & Income SA 7.29 “Strong risk-adjusted returns over the long haul…” “Quirky, but impressive…” Barclays S&P 500 Dynamic VEQTOR ETN VQT ETF 1.08 “A compelling portfolio diversifier…” 10000 4000 May-08Jan-09Sep-09May-10Jan-11Sep-11May-12Jan-13 Jun-08Feb-09Oct-09Jun-10Feb-11Oct-11Jun-12Feb-13 Jul-08 Mar-09Nov-09 Jul-10 Mar-11Nov-11 Jul-12 Mar-13 Aug-08Apr-09Dec-09Aug-10Apr-11Dec-11Aug-12Apr-13 Sep-08May-09Jan-10Sep-10May-11Jan-12Sep-12May-13 Oct-08Jun-09Feb-10Oct-10Jun-11Feb-12Oct-12 Nov-08 Jul-09 Mar-10Nov-10 Jul-11 Mar-12Nov-12 Dec-08Aug-09Apr-10Dec-10Aug-11Apr-12Dec-12 16000 14000 12000 10000 “A way to access volatility over longer periods…” 8000 May-08Jan-0 Jun-08FebJul-08 MaJ Aug-08Ap Sep-08M Oct-08 Nov-08 Dec-0 The April/May 2012 issue was mailed to subscribers in April 2012. Return data is from March 31, 2012, through March 31, 2013. MorningstarAdvisor.com 19 http://www.MorningstarAdvisor.com

Table of Contents for the Digital Edition of Morningstar Advisor - June/July 2013

Morningstar Advisor - June/July 2013
Contents
Contributors
Letter From the Editor
Not Your Values
How Do You Use Alternatives for Clients?
Working to Build a Niche
How to Put Buffett’s Investing Philosophy into Practice
Sophisticated Strategies for the Masses
Investments á la Carte
Investment Briefs
The Percentile Trap
Defense Firms Will Stay Aloft
Beware the Lure of Diversification
Using Alternatives in Practice
Managed Futures and Cash Rates
The World Is Getting Grayer
Waiting to Pull Up Anchor
The Price of Managing Volatility
Let’s Get Back to Basics
Our Favorite Mutual Funds
50 Most-Popular Equity ETFs
Undervalued Stocks With Wide Moats
Mutual Fund Urban Myths

Morningstar Advisor - June/July 2013