Morningstar Advisor - Spring 2007 - 6

Contributors Ryan Tagal, Daniel Farkas, Gareth Lyons, and Nadia Van Dalen Writing Morningstar Advisor’s spotlight section (page 20) confirmed for Morningstar’s hedge fund team the difficulties advisors and their clients face when it comes to investing in hedge funds. “It was sobering to be reminded of just how undemocratic the hedge-fund world is,” analyst Gareth Lyons says. “We have a ways to go before the average investor will be able to gain access to a top-tier hedge fund manager who pays close attention to after-tax returns.” Taxes concern analyst Daniel Farkas, too. “The fact that tax-efficiency is such a nonissue in most hedge fund analysis exemplifies just how much hedge funds are tailored for non-taxable investors. It was eye-opening to look at the impact that the structural characteristics of the hedge fund industry has on individual investors, who are an afterthought.” Still, writing the section was a chance to present some levelheaded analysis to balance out all the hype hedge funds are getting in the financial media nowadays. “It’s easy for investors to get caught up in it,” analyst Nadia Van Dalen says. “Don’t get me wrong, there are some great hedge fund managers out there, but most are not worthy of the fees they charge. You must arm yourself with good information to filter out the losers.” Ryan Tagal, Morningstar’s director of hedge funds and alternative investments, agrees. “Advisors want impartial answers, and that’s Morningstar’s forte.” Karen Dolan As a mutual fund analyst, Karen Dolan frequently interviews managers, but her profile of Arnie Schneider (page 46) forced her to alter her approach. “I had to take my analyst hat off and try to see the more personal side of Schneider,” she says. “I paid special attention to the intangibles, and they only reconfirmed my opinion of Schneider’s investing capabilities.” She also got to talk with some advisors. “I was surprised at how much we had in common,” she says. “In a lot of ways, we’re striving toward the same goal: To find good managers who invest well.” Laura Lallos Laura Lallos’ feature on fund manager Scott Brayman (page 41) marks her return to both journalism and Morningstar. She served as an analyst and editor at Morningstar from 1993 to 2000 and covered mutual funds as a senior writer for Money until 2002. She then earned her J.D. from the University of Chicago and is raising her young daughter. Getting away from a dreary Chicago winter to interview Brayman in Burlington, Vt., was almost as good as a vacation, Lallos says. “I flew in at night, and when I woke up and saw the view from the hotel window, I wanted to add another day to my trip. Brayman isn’t exaggerating when he describes the ‘Green Mountain handcuffs’ that keep his team working happily together in Burlington.” Lloyd Miller In illustrating the cover and inside features of the magazine, Lloyd Miller wanted to avoid using the standard investing symbols. “For me the ‘murky world of hedge funds’ was exactly that when I began illustrating this project,” says Miller, whose work has appeared in The New York Times, The Wall Street Journal, The Washington Post, Esquire, Fortune, and Money. “I tend to have a blind spot for the finer points of investing anyway,” he says, “so it was interesting coming up with pictorial analogies to making information comprehensible without employing financial imagery, which I try to avoid if possible.” 6 Morningstar Advisor Spring 2007

Morningstar Advisor - Spring 2007

Table of Contents for the Digital Edition of Morningstar Advisor - Spring 2007

Morningstar Advisor Spring 2007
Features
Departments
Letter from Joe Mansueto
Get to Know Morningstar’s Fund Managers of the Year
Is Your Client a Stock or a Bond?
Less Alpha, More Beta Than Meets the Eye
Your Mileage May Vary
A Clear-Eyed Look at Hedge Funds
Lower Risk, Higher Returns, What’s Not to Like?
Without Cash and Clout, Advisors and Clients Get Short End of Stick
Get the Strategy Minus the Headaches
Analyzing Funds of Hedge Funds
Not All Hedge Funds Are Created Equal
A Fund with a (Long) View
Laying Low and Prospering
A Menu of Ideas to Fill Five Market Baskets
Oil and Gas Gushing with Values
Mutual Fund Analyst Picks
Undervalued Stocks
Most Popular Variable Annuities
What’s New at Morningstar and on the Web
You Can’t Always Get What You Want
Morningstar Advisor - Spring 2007 - Cover 1
Morningstar Advisor - Spring 2007 - Cover2
Morningstar Advisor - Spring 2007 - Features
Morningstar Advisor - Spring 2007 - Departments
Morningstar Advisor - Spring 2007 - 3
Morningstar Advisor - Spring 2007 - 4
Morningstar Advisor - Spring 2007 - Letter from Joe Mansueto
Morningstar Advisor - Spring 2007 - 6
Morningstar Advisor - Spring 2007 - 7
Morningstar Advisor - Spring 2007 - Get to Know Morningstar’s Fund Managers of the Year
Morningstar Advisor - Spring 2007 - 9
Morningstar Advisor - Spring 2007 - 10
Morningstar Advisor - Spring 2007 - 11
Morningstar Advisor - Spring 2007 - Is Your Client a Stock or a Bond?
Morningstar Advisor - Spring 2007 - 13
Morningstar Advisor - Spring 2007 - 14
Morningstar Advisor - Spring 2007 - 15
Morningstar Advisor - Spring 2007 - Less Alpha, More Beta Than Meets the Eye
Morningstar Advisor - Spring 2007 - 17
Morningstar Advisor - Spring 2007 - Your Mileage May Vary
Morningstar Advisor - Spring 2007 - 19
Morningstar Advisor - Spring 2007 - A Clear-Eyed Look at Hedge Funds
Morningstar Advisor - Spring 2007 - 21
Morningstar Advisor - Spring 2007 - Lower Risk, Higher Returns, What’s Not to Like?
Morningstar Advisor - Spring 2007 - 23
Morningstar Advisor - Spring 2007 - Without Cash and Clout, Advisors and Clients Get Short End of Stick
Morningstar Advisor - Spring 2007 - 25
Morningstar Advisor - Spring 2007 - 26
Morningstar Advisor - Spring 2007 - 27
Morningstar Advisor - Spring 2007 - Get the Strategy Minus the Headaches
Morningstar Advisor - Spring 2007 - 29
Morningstar Advisor - Spring 2007 - 30
Morningstar Advisor - Spring 2007 - 31
Morningstar Advisor - Spring 2007 - 32
Morningstar Advisor - Spring 2007 - Analyzing Funds of Hedge Funds
Morningstar Advisor - Spring 2007 - 34
Morningstar Advisor - Spring 2007 - 35
Morningstar Advisor - Spring 2007 - 36
Morningstar Advisor - Spring 2007 - 37
Morningstar Advisor - Spring 2007 - Not All Hedge Funds Are Created Equal
Morningstar Advisor - Spring 2007 - 39
Morningstar Advisor - Spring 2007 - 40
Morningstar Advisor - Spring 2007 - A Fund with a (Long) View
Morningstar Advisor - Spring 2007 - 42
Morningstar Advisor - Spring 2007 - 43
Morningstar Advisor - Spring 2007 - 44
Morningstar Advisor - Spring 2007 - 45
Morningstar Advisor - Spring 2007 - Laying Low and Prospering
Morningstar Advisor - Spring 2007 - 47
Morningstar Advisor - Spring 2007 - 48
Morningstar Advisor - Spring 2007 - 49
Morningstar Advisor - Spring 2007 - A Menu of Ideas to Fill Five Market Baskets
Morningstar Advisor - Spring 2007 - 51
Morningstar Advisor - Spring 2007 - 52
Morningstar Advisor - Spring 2007 - 53
Morningstar Advisor - Spring 2007 - 54
Morningstar Advisor - Spring 2007 - 55
Morningstar Advisor - Spring 2007 - 56
Morningstar Advisor - Spring 2007 - Oil and Gas Gushing with Values
Morningstar Advisor - Spring 2007 - 58
Morningstar Advisor - Spring 2007 - 59
Morningstar Advisor - Spring 2007 - 60
Morningstar Advisor - Spring 2007 - 61
Morningstar Advisor - Spring 2007 - Mutual Fund Analyst Picks
Morningstar Advisor - Spring 2007 - 63
Morningstar Advisor - Spring 2007 - 64
Morningstar Advisor - Spring 2007 - 65
Morningstar Advisor - Spring 2007 - Undervalued Stocks
Morningstar Advisor - Spring 2007 - 67
Morningstar Advisor - Spring 2007 - Most Popular Variable Annuities
Morningstar Advisor - Spring 2007 - 69
Morningstar Advisor - Spring 2007 - What’s New at Morningstar and on the Web
Morningstar Advisor - Spring 2007 - 71
Morningstar Advisor - Spring 2007 - 72
Morningstar Advisor - Spring 2007 - 73
Morningstar Advisor - Spring 2007 - 74
Morningstar Advisor - Spring 2007 - 75
Morningstar Advisor - Spring 2007 - You Can’t Always Get What You Want
Morningstar Advisor - Spring 2007 - Cover3
Morningstar Advisor - Spring 2007 - Cover4
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