Spring 2008 Departments 7 9 Letter from the Editor Inbox Gray Matters 22 Let’s Not All Become Fundamental Indexers Just Yet The air is coming out of the argument that fundamental indexing is a revolutionary innovation. 26 Volatility Potential Is implied volatility an asset class, and if so, how can it fit into a portfolio? Sector Rap 74 Is Health Care Immune to a Recession? Health care is historically resistant to economic downturns, but the sector could be more vulnerable in the future. By the Numbers 83 Mutual Fund Analyst Picks 89 Undervalued Stocks 92 Most Popular Variable Annuities On Topic 10 Do You Use Annuities with Living Benefit Guarantees? In the Loop 95 New at Morningstar and on MorningstarAdvisor.com 10 Questions 12 Managers Who Actively Enrich Shareholders Bond Fix 76 Anatomy of a Mutual Fund Disaster How redemptions and illiquid market conditions conspired to unravel two funds. Phillips Curve 96 Back to the Garden Advisor Profile 15 Staying Out of the Silos A Midwestern planning firm finds success with an atypical management structure. 18 Investment Briefs Investments á la Carte 68 Sleep Like a Baby Fourteen fundamentally sound picks that the sandman would love. Screens 78 Embrace Your Inner Contrarian 80 Risks Worth Taking 4