Morningstar Advisor - Spring 2008 - 72

Investments á la Carte Manning & Napier Non-U.S. Equity $31K 24 MSCI EAFE TR 17 on large caps from developed markets while doing so. The fund’s average market cap normally exceeds the group norm. In addition, the only emerging market in which they look for opportunities is South Korea (which many consider to be a developed market), and they tend to invest limited amounts there. 03 04 05 06 07 08 SA This lesser-known separate account is a Non-Market Correlated winner. It’s run by Manning & Napier, who we In recent years, the quest by invesprofiled in the Fall 2007 issue of the magazine. tors for securities that aren’t Like all Manning & Napier offerings, its team correlated with the U.S. market has manages using an eclectic, bottom-up approach led to the launch of some complex that targets growth, value, and cyclical plays. Top-10 holding Calfrac is an example of the products. Many of these use a latter. It was recently purchased after tumbling labyrinth of hedging strategies on macroeconomic concerns. But the managers across several global assets classes say the Canadian gas-well-services firm is in their quest for “uncorrelated well positioned for the long haul based on alpha.” Not all succeed and most secular trends and its own global expansion. Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 This separate account has provided the best of come with a hefty price tag. It Feb-03Sep-03Apr-04 Feb-05Sep-05 May-06 Feb-07Sep-07 Mar-03Oct-03 Jun-04 Mar-05Oct-05 Jun-06 Mar-07Oct-07 Apr-03 Feb-04Sep-04Apr-05 Feb-06Sep-06Apr-07 Feb-08 May-03 Mar-04Oct-04 Jun-05 Mar-06Oct-06 Jun-07 Jun-03 May-04 Jul-03 Aug-03 Jul-04 May-05 Nov-03 Aug-04 Jul-05 Aug-05 Jul-06 May-07 Aug-06 Jul-07 Nov-06 Aug-07 Dec-06 Nov-07 all worlds. It isn’t excessively volatile, has held Dec-03 Nov-04 Dec-04 Nov-05 Dec-05 Apr-06 Dec-07 doesn’t have to be that hard or up well in down markets, and has outperformed 22000 expensive. Below are some easyover time. Its risk/reward profile is among 19000 access ways to add diversification the best in its category. Manning & Napier isn’t 16000 without breaking the bank. a household name, but it should be. parked overseas). Both stakes have been a boon, as both areas have pushed past domestic large-cap stocks in recent years. Decker focuses on firms that are undervalued based on his estimate of future earnings potential with the ability to increase returns on invested capital. In 2006, he significantly increased his position in Owens-Illinois OI, a move that paid off in spades last year as the firm began increasing margins and returns on capital under new management. Takeover news surrounding a handful of holdings—such as Station Casinos STN and Sallie Mae SLM—also boosted returns last year. Decker will still invest in controversy, but an increased focus on clean balance sheets and strong cash-flow generation should help the fund navigate the next market downturn better than the last. In fact, he used the fund’s flexible mandate to add index puts to the portfolio in the second half of 2007 on concerns that the U.S. economy would slow. Davis Real Estate $22K 19 16 S&P 500 04 05 06 07 08 13000 Causeway International Value Inv CIVVX $31K 10000 Overview by Michael Breen Janus Contrarian JSVAX 24 $34K 28 MSCI EAFE TR 22 03 04 05 06 07 08 S&P 500 17 MF This fund reopened to new investors Feb. 1 after being closed for several years, which is a sign that managers are finding ways to put money to work in this challenging environment. That’s a good thing. Investors should lose sleep over funds that are taking in assets too quickly and have to invest them in marginal ideas; the opposite is happening here. The managers are uncompromising bargain-hunters who never chase hot stocks or sectors. They often add to names because of weakness and load up on issues in out-of-favor areas, and they focus 03 04 05 06 07 08 This fund takes risks, but its manager is talented and focused on absolute returns. Veteran manager David Decker doesn’t care much for categories or benchmarks. Although the fund currently resides in the large-blend category, it strikes its own pose among its peers. He typically holds more mid-cap stocks than the category norm and has found numerous values outside the United States (at last count, 40% of the fund’s assets were MF Like all real-estate products, this separate account has a low correlation with the S&P 500 Index. Managers Andrew Davis and Chandler Spears use an eclectic but cautious approach that focuses on REITs trading at discounts to their estimates of future cash flows. They are contrarians who’ll also dabble in other security types when the opportunity arises. For example, they hold the convertible debt of Prologis, which owns industrial distribution sites around the globe. The risk/reward profile was right Jan-04 the firm fits the duo’s themeJan-07 Jan-05 Jan-06 and of firms Jan-08 benefitting from the expanding global supply Feb-04Aug-04Feb-05Aug-05Feb-06Aug-06Feb-07Aug-07Feb-08 Mar-04Sep-04Mar-05Sep-05Mar-06Sep-06Mar-07Sep-07 Apr-04 Oct-04 Apr-05 Oct-05 Apr-06 Oct-06 Apr-07 Oct-07 May-04 Jun-04 Jul-04 May-05Nov-05May-06 Jun-05 Jul-05 Jun-06 Jul-06 May-07Nov-07 Jun-07Dec-07 Jul-07 chain, especially in Dec-05 TheyDec-06recently China. Nov-06 also Nov-04 Dec-04 took a small contrarian bet on bond insurer Ambac ABK. This offering has produced solid returns over time, and Davis is a top steward of investor capital. K SA Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Feb-03Sep-03Apr-04Advisor Jul-05 Feb-06Sep-06Apr-07 Dec-07 Mar-03Oct-03 Jun-04 Mar-05Oct-05 Jun-06 Feb-07Sep-07 Apr-03 Dec-03Jul-04 May-05 Mar-06Oct-06 Jun-07 Feb-08 May-03 Mar-04Oct-04 Jun-05 2008 Nov-06 Jul-07 Jul-03 May-04 Aug-03 Nov-03 Aug-04 Sep-05 Dec-06 Nov-07 72Jun-03 Feb-04Sep-04Apr-05Nov-05 Jul-06 Mar-07Oct-07 Morningstar Nov-04 Aug-05 May-06 May-07 Spring Aug-06 Aug-07 Dec-04 Feb-05 Dec-05 Apr-06 Feb-03Sep-03 May-04 Feb-05Sep-05Apr-06 Dec-06Jul-07Feb-08 Mar-03Oct-03 Jun-04 Mar-05Oct-05 Jun-06 Feb-07Sep-07 Apr-03 Dec-03Jul-04 Apr-05 Feb-06Sep-06Apr-07 May-03 Feb-04Sep-04 May-05 Jun-03 Mar-04Oct-04 Jun-05 May-06 Mar-07Oct-07 Jul-03 Aug-03 Nov-03 Aug-04 Jul-05 Nov-04 Aug-05 Jul-06 May-07 Dec-04 Aug-06 Jun-07 Oct-06 Aug-07 Nov-06 Nov-07 Apr-04 Nov-05 Dec-05 Mar-06 Dec-07

Morningstar Advisor - Spring 2008

Table of Contents for the Digital Edition of Morningstar Advisor - Spring 2008

Morningstar Advisor - Spring 2008
Contents
Letter from the Editor
Inbox
Do You Use Annuities with Living Benefit Guarantees?
Managers Who Actively Enrich Shareholders
Staying Out of the Silos
Investment Briefs
Let’s Not All Become Fundamental Indexers Just Yet
Volatility Potential
Adding the Income Dimension
Do’s and Don’ts of RMDs
An Attractive Yield is Only Skin Deep
Mutual Funds Get in the Game
Beyond Target Date
The Last Holdout
A Bird of a Different Feather
First-Class Thinker
Sleep Like a Baby
Is Health Care Immune to a Recession?
Anatomy of a Mutual Fund Disaster
Embrace Your Inner Contrarian
Risks Worth Taking
Mutual Fund Analyst Picks
Undervalued Stocks
Most Popular Variable Annuities
New at Morningstar and on MorningstarAdvisor.com
Back to the Garden
Morningstar Advisor - Spring 2008 - Intro
Morningstar Advisor - Spring 2008 - Morningstar Advisor - Spring 2008
Morningstar Advisor - Spring 2008 - Cover2
Morningstar Advisor - Spring 2008 - 1
Morningstar Advisor - Spring 2008 - 2
Morningstar Advisor - Spring 2008 - Contents
Morningstar Advisor - Spring 2008 - 4
Morningstar Advisor - Spring 2008 - 5
Morningstar Advisor - Spring 2008 - 6
Morningstar Advisor - Spring 2008 - Letter from the Editor
Morningstar Advisor - Spring 2008 - 8
Morningstar Advisor - Spring 2008 - Inbox
Morningstar Advisor - Spring 2008 - Do You Use Annuities with Living Benefit Guarantees?
Morningstar Advisor - Spring 2008 - 11
Morningstar Advisor - Spring 2008 - Managers Who Actively Enrich Shareholders
Morningstar Advisor - Spring 2008 - 13
Morningstar Advisor - Spring 2008 - 14
Morningstar Advisor - Spring 2008 - Staying Out of the Silos
Morningstar Advisor - Spring 2008 - 16
Morningstar Advisor - Spring 2008 - 17
Morningstar Advisor - Spring 2008 - Investment Briefs
Morningstar Advisor - Spring 2008 - 19
Morningstar Advisor - Spring 2008 - 20
Morningstar Advisor - Spring 2008 - 21
Morningstar Advisor - Spring 2008 - Let’s Not All Become Fundamental Indexers Just Yet
Morningstar Advisor - Spring 2008 - 23
Morningstar Advisor - Spring 2008 - 24
Morningstar Advisor - Spring 2008 - 25
Morningstar Advisor - Spring 2008 - Volatility Potential
Morningstar Advisor - Spring 2008 - 27
Morningstar Advisor - Spring 2008 - 28
Morningstar Advisor - Spring 2008 - 29
Morningstar Advisor - Spring 2008 - 30
Morningstar Advisor - Spring 2008 - 31
Morningstar Advisor - Spring 2008 - Adding the Income Dimension
Morningstar Advisor - Spring 2008 - 33
Morningstar Advisor - Spring 2008 - 34
Morningstar Advisor - Spring 2008 - 35
Morningstar Advisor - Spring 2008 - Do’s and Don’ts of RMDs
Morningstar Advisor - Spring 2008 - 37
Morningstar Advisor - Spring 2008 - 38
Morningstar Advisor - Spring 2008 - 39
Morningstar Advisor - Spring 2008 - An Attractive Yield is Only Skin Deep
Morningstar Advisor - Spring 2008 - 41
Morningstar Advisor - Spring 2008 - Mutual Funds Get in the Game
Morningstar Advisor - Spring 2008 - 43
Morningstar Advisor - Spring 2008 - 44
Morningstar Advisor - Spring 2008 - 45
Morningstar Advisor - Spring 2008 - 46
Morningstar Advisor - Spring 2008 - Beyond Target Date
Morningstar Advisor - Spring 2008 - 48
Morningstar Advisor - Spring 2008 - 49
Morningstar Advisor - Spring 2008 - 50
Morningstar Advisor - Spring 2008 - 51
Morningstar Advisor - Spring 2008 - 52
Morningstar Advisor - Spring 2008 - The Last Holdout
Morningstar Advisor - Spring 2008 - 54
Morningstar Advisor - Spring 2008 - 55
Morningstar Advisor - Spring 2008 - 56
Morningstar Advisor - Spring 2008 - 57
Morningstar Advisor - Spring 2008 - 58
Morningstar Advisor - Spring 2008 - 59
Morningstar Advisor - Spring 2008 - A Bird of a Different Feather
Morningstar Advisor - Spring 2008 - 61
Morningstar Advisor - Spring 2008 - 62
Morningstar Advisor - Spring 2008 - 63
Morningstar Advisor - Spring 2008 - First-Class Thinker
Morningstar Advisor - Spring 2008 - 65
Morningstar Advisor - Spring 2008 - 66
Morningstar Advisor - Spring 2008 - 67
Morningstar Advisor - Spring 2008 - Sleep Like a Baby
Morningstar Advisor - Spring 2008 - 69
Morningstar Advisor - Spring 2008 - 70
Morningstar Advisor - Spring 2008 - 71
Morningstar Advisor - Spring 2008 - 72
Morningstar Advisor - Spring 2008 - 73
Morningstar Advisor - Spring 2008 - Is Health Care Immune to a Recession?
Morningstar Advisor - Spring 2008 - 75
Morningstar Advisor - Spring 2008 - Anatomy of a Mutual Fund Disaster
Morningstar Advisor - Spring 2008 - 77
Morningstar Advisor - Spring 2008 - Embrace Your Inner Contrarian
Morningstar Advisor - Spring 2008 - 79
Morningstar Advisor - Spring 2008 - Risks Worth Taking
Morningstar Advisor - Spring 2008 - 81
Morningstar Advisor - Spring 2008 - 82
Morningstar Advisor - Spring 2008 - Mutual Fund Analyst Picks
Morningstar Advisor - Spring 2008 - 84
Morningstar Advisor - Spring 2008 - 85
Morningstar Advisor - Spring 2008 - 86
Morningstar Advisor - Spring 2008 - 87
Morningstar Advisor - Spring 2008 - 88
Morningstar Advisor - Spring 2008 - Undervalued Stocks
Morningstar Advisor - Spring 2008 - 90
Morningstar Advisor - Spring 2008 - 91
Morningstar Advisor - Spring 2008 - Most Popular Variable Annuities
Morningstar Advisor - Spring 2008 - 93
Morningstar Advisor - Spring 2008 - 94
Morningstar Advisor - Spring 2008 - New at Morningstar and on MorningstarAdvisor.com
Morningstar Advisor - Spring 2008 - Back to the Garden
Morningstar Advisor - Spring 2008 - Cover3
Morningstar Advisor - Spring 2008 - Cover4
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