Morningstar Advisor - February/March 2009 - 58

Investments á la Carte Four Picks for the Present Editor’s Note: As Morningstar Advisor moves to a new bimonthly schedule, we’ve revised Investments á la Carte to give our analysts a chance to pick what they see are the best current opportunities. Exchange-Traded Fund ELEMENTS S&P CTI ETN LSC $12K 11 10 9 S&P CTI ETN 000 1000 10000 000 8000 it still can face liquidity problems because it is so new. We advise investors to check the net asset value and use limit orders to ensure they buy their shares at fair value. Paul Justice Stock Compass Minerals CMP $68K 53 Separate Account UMB Asset Management International Equity Oct 08 Nov 08 Dec 08 $30K 25 20 15 03 04 05 06 07 08 MSCI EAFE TR 30000 25000 Jul 08 Aug 08 Sept 08 This new ETN provides commodity exposure 20000 38 with brains: Its long-short strategy allows this 15000 fund to capture roll yields and provide 23 S&P 500 TR positive returns in a number of economic 10000 04 05 06 07 08 environments. Each month, the index underlying this ETN takes long or short positions in each We love this mid-cap stock. It has strong of six commodity sectors (energy, precious competitive advantages as a result of metals, industrial metals, grains, livestock, and its world-class rock salt and sulfate of potash more-exotic agricultural goods) based on resources. Compass’ major offering is whether the sector index’s current price highway de-icing salt, so profitability is isJul-08 Aug-08 Sep-08 Oct-08 Nov-08ofDec-08 above or below a weighted average the determined by snowy, icy winter weather. The previous seven months’ prices. We think that firm also produces salt for consumer and this strategy has a solid theoretical base industrial uses, such as water conditioning, because the macroeconomic and supply trends livestock feed, food processing, and table salt. that drive commodity prices tend to persist Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Compass also produces SOP, a fertilizer over multimonth periods. Even if commodity thatSep-04May-05 yieldSep-06May-07of high-Oct-08 improvesSep-05May-06 Apr-07 Apr-08 the Feb-04Oct-04 Jun-05Feb-06and Mar-07Nov-07 Jul-08 Mar-04Nov-04 Jul-05 Mar-06Nov-06 Jul-07 Mar-08Nov-08 Apr-04 Feb-05Oct-05 Jun-06Feb-07Oct-07 Jun-08 May-04 Mar-05Nov-05 Jul-06 quality Feb-08 Dec-08 prices remain stable, this fund can benefit from Jun-04 Apr-05 Jul-04 Aug-04 Aug-05Apr-06 Aug-06 Jun-07 May-08 Oct-06 Aug-07 Aug-08 Sep-07 Sep-08 value Dec-04Compass is expandingDec-07 crops. Dec-05 Dec-06 its highway changes in the futures price over time even for de-icing salt and SOP production capacity, the few expensive-to-store commodities which should result in profitable sales growth. that provide negative roll yields. Years of data In addition, SOP prices are increasing on this strategy suggest that it will provide the dramatically, thanks to strong global demand same diversification benefits as a traditional for fertilizers and tight supply. As the world’s long-only commodities stake, but with population grows, the amount of arable higher long-term returns potential. As an ETN, land per person decreases. Further, increasing this fund is backed by the debt of HSBC Bank personal income in developing countries is instead of a portfolio of cash and futures. driving people to change their diets. Finally, This eliminates tracking error against the index high crude oil prices and political considerbut also subjects investors to the bank’s credit ations have motivated countries to encourage risk. Fortunately, HSBC has weathered the biofuel production. All of these factors credit storm and currently has the highest contribute to growing demand for fertilizers. market capitalization of any bank in the world. Haywood Kelly Trading volumes have improved in this fund, but UMB Asset Management International Equity is down but far from out. This proven winner is run by James Moffett, who has a stellar long-term record here and at mutual fund UMB Scout International UMBWX. Like all international offerings, this one hasn’t been immune to the global downturn that has crushed stocks in all markets. This separate account was deep in the red in 2008 but lost less than the MSCI EAFE Index and the bulk of international-equity strategies. That will be of little consolation to those who bought in recently, but long-term holders are still in great Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 shape and new prospects will be well Feb-03 Feb-04 theyJun-05theJul-06 Apr-07 Feb-08 Mar-03 Mar-04 Feb-05 Feb-06 Feb-07 Mar-08 Apr-03 Apr-04 Mar-05 Mar-06 Mar-07 Apr-08 May-03 May-04 Apr-05 Apr-06 May-07 May-08 Jun-03 Jun-04 May-05 Jun-06 Jul-07 Jul-08 Jul-03 Jul-04 Jul-05 Aug-06 Aug-07 Aug-08 Aug-03 Sep-04 Aug-05 plunge. Moffett has Sep-03 if Oct-03 Oct-04 Sep-05 Sep-06 Sep-07 Sep-08 Nov-04 Oct-05 Oct-06 Oct-07 Oct-08 Nov-05 Nov-06 positionedAug-04 take May-06 Jun-07 Jun-08 Nov-03 Dec-04 Dec-05 Dec-06 Nov-07 Dec-03 Dec-07 long had success using a combination of macroeconomic forecasting and pure bottom-up stock-picking. In nutshell, he looks for countries and sectors with the strongest economic trends and then buys financially sound firms with stable businesses within those areas. He has executed this process with aplomb over time, and we expect the same going forward. We remain fully confident in Moffett and this strategy. Michael Breen 58 Morningstar Advisor February/March 2009

Morningstar Advisor - February/March 2009

Table of Contents for the Digital Edition of Morningstar Advisor - February/March 2009

Morningstar Advisor - February/March 2009
Contents
New on MorningstarAdvisor.com
Letter from the Editor
Contributors
Inbox
How Do You Gauge and Measure Risk?
No Skinny-Dippers Here
Heading to Shore
Investment Briefs
Weapons of Mass Destruction?
Déjà Vu All Over Again
A Failure to Gauge Risk
Five Areas to Find Opportunities
Getting a Read on Risk
Heavenly Returns
Greenspring Comes to the Rescue
How to Spot a Trustworthy REIT
Four Picks for the President
Find Succor in These Large Dividends
These Stocks Are Fiscally Fit
Mutual Fund Analyst Picks
50 Most Popular Equity ETFs
Undervalued Stocks
Most Popular Variable Annuities
New at Morningstar
You Gotta Look Sharpe
Morningstar Advisor - February/March 2009 - Intro
Morningstar Advisor - February/March 2009 - Morningstar Advisor - February/March 2009
Morningstar Advisor - February/March 2009 - Cover2
Morningstar Advisor - February/March 2009 - 1
Morningstar Advisor - February/March 2009 - 2
Morningstar Advisor - February/March 2009 - Contents
Morningstar Advisor - February/March 2009 - 4
Morningstar Advisor - February/March 2009 - 5
Morningstar Advisor - February/March 2009 - New on MorningstarAdvisor.com
Morningstar Advisor - February/March 2009 - 7
Morningstar Advisor - February/March 2009 - 8
Morningstar Advisor - February/March 2009 - Letter from the Editor
Morningstar Advisor - February/March 2009 - Contributors
Morningstar Advisor - February/March 2009 - Inbox
Morningstar Advisor - February/March 2009 - How Do You Gauge and Measure Risk?
Morningstar Advisor - February/March 2009 - 13
Morningstar Advisor - February/March 2009 - No Skinny-Dippers Here
Morningstar Advisor - February/March 2009 - 15
Morningstar Advisor - February/March 2009 - 16
Morningstar Advisor - February/March 2009 - Heading to Shore
Morningstar Advisor - February/March 2009 - 18
Morningstar Advisor - February/March 2009 - 19
Morningstar Advisor - February/March 2009 - Investment Briefs
Morningstar Advisor - February/March 2009 - 21
Morningstar Advisor - February/March 2009 - Weapons of Mass Destruction?
Morningstar Advisor - February/March 2009 - 23
Morningstar Advisor - February/March 2009 - 24
Morningstar Advisor - February/March 2009 - 25
Morningstar Advisor - February/March 2009 - 26
Morningstar Advisor - February/March 2009 - 27
Morningstar Advisor - February/March 2009 - Déjà Vu All Over Again
Morningstar Advisor - February/March 2009 - 29
Morningstar Advisor - February/March 2009 - 30
Morningstar Advisor - February/March 2009 - 31
Morningstar Advisor - February/March 2009 - 32
Morningstar Advisor - February/March 2009 - 33
Morningstar Advisor - February/March 2009 - A Failure to Gauge Risk
Morningstar Advisor - February/March 2009 - 35
Morningstar Advisor - February/March 2009 - 36
Morningstar Advisor - February/March 2009 - 37
Morningstar Advisor - February/March 2009 - Five Areas to Find Opportunities
Morningstar Advisor - February/March 2009 - 39
Morningstar Advisor - February/March 2009 - Getting a Read on Risk
Morningstar Advisor - February/March 2009 - 41
Morningstar Advisor - February/March 2009 - 42
Morningstar Advisor - February/March 2009 - 43
Morningstar Advisor - February/March 2009 - 44
Morningstar Advisor - February/March 2009 - 45
Morningstar Advisor - February/March 2009 - 46
Morningstar Advisor - February/March 2009 - 47
Morningstar Advisor - February/March 2009 - Heavenly Returns
Morningstar Advisor - February/March 2009 - 49
Morningstar Advisor - February/March 2009 - 50
Morningstar Advisor - February/March 2009 - 51
Morningstar Advisor - February/March 2009 - Greenspring Comes to the Rescue
Morningstar Advisor - February/March 2009 - 53
Morningstar Advisor - February/March 2009 - 54
Morningstar Advisor - February/March 2009 - 55
Morningstar Advisor - February/March 2009 - How to Spot a Trustworthy REIT
Morningstar Advisor - February/March 2009 - 57
Morningstar Advisor - February/March 2009 - Four Picks for the President
Morningstar Advisor - February/March 2009 - 59
Morningstar Advisor - February/March 2009 - Find Succor in These Large Dividends
Morningstar Advisor - February/March 2009 - 61
Morningstar Advisor - February/March 2009 - These Stocks Are Fiscally Fit
Morningstar Advisor - February/March 2009 - 63
Morningstar Advisor - February/March 2009 - Mutual Fund Analyst Picks
Morningstar Advisor - February/March 2009 - 65
Morningstar Advisor - February/March 2009 - 66
Morningstar Advisor - February/March 2009 - 67
Morningstar Advisor - February/March 2009 - 50 Most Popular Equity ETFs
Morningstar Advisor - February/March 2009 - 69
Morningstar Advisor - February/March 2009 - 70
Morningstar Advisor - February/March 2009 - 71
Morningstar Advisor - February/March 2009 - Undervalued Stocks
Morningstar Advisor - February/March 2009 - 73
Morningstar Advisor - February/March 2009 - 74
Morningstar Advisor - February/March 2009 - 75
Morningstar Advisor - February/March 2009 - Most Popular Variable Annuities
Morningstar Advisor - February/March 2009 - 77
Morningstar Advisor - February/March 2009 - 78
Morningstar Advisor - February/March 2009 - New at Morningstar
Morningstar Advisor - February/March 2009 - You Gotta Look Sharpe
Morningstar Advisor - February/March 2009 - Cover3
Morningstar Advisor - February/March 2009 - Cover4
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