Morningstar Advisor - June/July 2009 - 18

Investment Briefs Best and Worst 529 Plans Chosen Analyst Greg Brown recently unveiled Morningstar’s best and worst 529 plans for this year, and the biggest news was how much the market’s woes hurt Oppenheimer’s offerings. Here’s the list: Best 529 College-Savings Plans Ohio CollegeAdvantage 529 Savings Plan Ohio is in an interesting position. The state has two plans at opposite ends of the quality spectrum, with this direct-sold plan securely in the “best” camp. One of the most important features of this plan is that the Ohio Tuition Trust Authority not only created the plan, but it also manages it directly. Indiana CollegeChoice 529 Direct Savings Plan This direct-sold plan is a newcomer to Morningstar’s 529 best list. Upromise Investments—a subsidiary of the popular Upromise rewards program—took over this plan from J.P. Morgan in the fall of 2008 and upgraded it to a best-in-class choice for investors. The Utah Educational Savings Plan Trust For those who want a tax-sheltered way to save for college using Vanguard index funds, this is the plan. Utah’s 529 plan has long been a favorite of ours and remains a strong choice for its low costs, flexibility, and tried-and-true Vanguard index funds. Virginia Education Savings Trust and Virginia CollegeAmerica 529 Savings Plan The final two plans are the only carry-overs from last year’s best list. The Education Savings Trust has a lot in common with Ohio’s direct-sold plan. Similar to the Buckeye plan, Virginia not only sponsors the plan but also manages it. The advisor-sold CollegeAmerica plan remains a favorite for its large selection of mostly first-rate American Fund mutual funds that give investors access to a broad array of asset classes, including emerging markets, small-cap foreign stocks, and foreign fixed-income securities. Worst 529 College-Savings Plans Nebraska State Farm College Savings Plan In November, this plan overhauled its underlying holdings with Oppenheimer mutual funds, and the timing couldn’t have been worse. Just as Oppenheimer Core Bond entered the plan as a prominent fixed-income holding, it imploded, dragging down shareholder assets in both the plan’s age-based options and its fixed-allocation options. New Jersey Best 529 College Savings Plan The first strike against this plan is its overly aggressive age-based option combined with a lack of flexibility. Even after a recent modification on April 1, the plan’s single age-based option can still have up to 60% of assets in equities in the years just before enrollment and have up to 35% in equities when a beneficiary is enrolled in college. Montana Pacific Life Funds 529 This is one of the least flexible plans around. Investors are offered only five fixedallocation portfolios and a money market option. There are no age-based options, which is troubling given how popular these options are. Ohio Putnam CollegeAdvantage At the opposite end of the spectrum from Ohio’s laudable direct-sold plan on our best list is this troubled college-savings plan. Similar to last year, we remain concerned about this plan mostly for its heavy exposure to Putnam funds. Nebraska AIM College Savings Plan Next to Ohio’s Putnam plan, this is the only other holdover from last year’s worst list. Few changes have occurred here, and the same problems—high fees and a lack of flexibility—still plague this plan. For an updated 529 map that shows every year’s winners and losers, head to MorningstarAdvisor.com. Benefits of Including Commodities in a Portfolio Recent market volatility has caused many investors to flee stocks for the relative safety of bonds and, in some cases, cash. What many investors may be unaware of is the role that commodities can play in an investment portfolio. According to Morningstar research and communications manager Jim Licato, history shows that by adding commodities to a balanced portfolio, risk was reduced without sacrificing potential return. Benefits of Including Commodities in a Portfolio Domestic Domestic with Commodities Stocks Bonds 60% 40% Stocks Bonds Commodities 27% 50% 23% 8.6% 7.5% Return Risk 8.6% 12.1% Return Risk The accompanying image illustrates the risk and return profiles of two investment portfolios over the past 20 years. Notice that by diversifying the original portfolio to include commodities, the overall risk of the portfolio, measured by standard deviation, was reduced drastically from 12.1% to 7.5%, while maintaining the same return of 8.6%. Traditional assets and commodities generally do not react identically to the same economic or market stimuli. Analysis of historical data shows that commodities have negative 18 Morningstar Advisor June/July 2009
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Morningstar Advisor - June/July 2009

Table of Contents for the Digital Edition of Morningstar Advisor - June/July 2009

Morningstar Advisr - June/July 2009
Contents
New on MorningstarAdvisor.com
Letter from the Editor
Contributors
Is SRI a Relevant Investment Strategy?
A Head for Numbers
Building a Business on SRI
Investment Briefs
The Liquidity Premium
Navigating the SRI Patchwork
Profit and Progress
How the Fed Contributes to Crises
Holding Steady
Appleseed Adds Value to SRI Formula
Four Picks for the Present
Long-Term Investors Can Find Value among Industrials
Higher Yields, Hold the Risk
Bargains in U.S. Industrials
Mutual Fund Analyst Picks
50 Most Popular Equity ETFs
Undervalued Stocks
Most Popular Variable Annuities
New at Morningstar
Talkin’ ‘bout a Revolution
Morningstar Advisor - June/July 2009 - 47
Morningstar Advisor - June/July 2009 - Morningstar Advisr - June/July 2009
Morningstar Advisor - June/July 2009 - Cover2
Morningstar Advisor - June/July 2009 - Contents
Morningstar Advisor - June/July 2009 - 2
Morningstar Advisor - June/July 2009 - 3
Morningstar Advisor - June/July 2009 - New on MorningstarAdvisor.com
Morningstar Advisor - June/July 2009 - 5
Morningstar Advisor - June/July 2009 - 6
Morningstar Advisor - June/July 2009 - Letter from the Editor
Morningstar Advisor - June/July 2009 - Contributors
Morningstar Advisor - June/July 2009 - 9
Morningstar Advisor - June/July 2009 - Is SRI a Relevant Investment Strategy?
Morningstar Advisor - June/July 2009 - 11
Morningstar Advisor - June/July 2009 - A Head for Numbers
Morningstar Advisor - June/July 2009 - 13
Morningstar Advisor - June/July 2009 - 14
Morningstar Advisor - June/July 2009 - Building a Business on SRI
Morningstar Advisor - June/July 2009 - 16
Morningstar Advisor - June/July 2009 - 17
Morningstar Advisor - June/July 2009 - Investment Briefs
Morningstar Advisor - June/July 2009 - 19
Morningstar Advisor - June/July 2009 - 20
Morningstar Advisor - June/July 2009 - 21
Morningstar Advisor - June/July 2009 - 22
Morningstar Advisor - June/July 2009 - The Liquidity Premium
Morningstar Advisor - June/July 2009 - 24
Morningstar Advisor - June/July 2009 - 25
Morningstar Advisor - June/July 2009 - 26
Morningstar Advisor - June/July 2009 - 27
Morningstar Advisor - June/July 2009 - 28
Morningstar Advisor - June/July 2009 - 29
Morningstar Advisor - June/July 2009 - Navigating the SRI Patchwork
Morningstar Advisor - June/July 2009 - 31
Morningstar Advisor - June/July 2009 - 32
Morningstar Advisor - June/July 2009 - 33
Morningstar Advisor - June/July 2009 - 34
Morningstar Advisor - June/July 2009 - Profit and Progress
Morningstar Advisor - June/July 2009 - 36
Morningstar Advisor - June/July 2009 - 37
Morningstar Advisor - June/July 2009 - 38
Morningstar Advisor - June/July 2009 - 39
Morningstar Advisor - June/July 2009 - How the Fed Contributes to Crises
Morningstar Advisor - June/July 2009 - 41
Morningstar Advisor - June/July 2009 - 42
Morningstar Advisor - June/July 2009 - 43
Morningstar Advisor - June/July 2009 - 44
Morningstar Advisor - June/July 2009 - 45
Morningstar Advisor - June/July 2009 - 46
Morningstar Advisor - June/July 2009 - 47
Morningstar Advisor - June/July 2009 - Holding Steady
Morningstar Advisor - June/July 2009 - 49
Morningstar Advisor - June/July 2009 - 50
Morningstar Advisor - June/July 2009 - 51
Morningstar Advisor - June/July 2009 - Appleseed Adds Value to SRI Formula
Morningstar Advisor - June/July 2009 - 53
Morningstar Advisor - June/July 2009 - 54
Morningstar Advisor - June/July 2009 - 55
Morningstar Advisor - June/July 2009 - Four Picks for the Present
Morningstar Advisor - June/July 2009 - 57
Morningstar Advisor - June/July 2009 - Long-Term Investors Can Find Value among Industrials
Morningstar Advisor - June/July 2009 - 59
Morningstar Advisor - June/July 2009 - 60
Morningstar Advisor - June/July 2009 - 61
Morningstar Advisor - June/July 2009 - Higher Yields, Hold the Risk
Morningstar Advisor - June/July 2009 - 63
Morningstar Advisor - June/July 2009 - Bargains in U.S. Industrials
Morningstar Advisor - June/July 2009 - 65
Morningstar Advisor - June/July 2009 - Mutual Fund Analyst Picks
Morningstar Advisor - June/July 2009 - 67
Morningstar Advisor - June/July 2009 - 68
Morningstar Advisor - June/July 2009 - 69
Morningstar Advisor - June/July 2009 - 50 Most Popular Equity ETFs
Morningstar Advisor - June/July 2009 - 71
Morningstar Advisor - June/July 2009 - Undervalued Stocks
Morningstar Advisor - June/July 2009 - 73
Morningstar Advisor - June/July 2009 - 74
Morningstar Advisor - June/July 2009 - 75
Morningstar Advisor - June/July 2009 - Most Popular Variable Annuities
Morningstar Advisor - June/July 2009 - 77
Morningstar Advisor - June/July 2009 - 78
Morningstar Advisor - June/July 2009 - New at Morningstar
Morningstar Advisor - June/July 2009 - Talkin’ ‘bout a Revolution
Morningstar Advisor - June/July 2009 - Cover3
Morningstar Advisor - June/July 2009 - Cover4
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