Morningstar Advisor - October/November 2010 - 50

Investments à la Carte

Four Picks for the Present
Mutual Fund: Templeton Global Total Return TGTRX
Category World Bond Asset Allocation
Cash US Stock Non US Stock Bond Other

Investment Style 3 Low Short

Average Eff. Duration (yrs) 3.07

Assets in Top 10 Holdings 25.94%

Average Credit Quality BB

Assets in Bonds 71.81%

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Solid bars represent the offering’s net exposure, and the clear bars show long and short exposure.

This world-bond fund only launched in late 2008, but it’s a proven entity. Manager Michael Hasenstab has generated a great longterm record at Templeton Global Bond, where sovereign debt and currency plays are the meat and potatoes. Here, Hasentab can pull more levers. He’s able to buy corporate bonds and can hold lower-quality debt. He did

just that in late 2008 when the market downdraft sent corporates plunging. When the market bounced back a few months later and spreads narrowed, the fund cleaned up. Hasenstab’s timing won’t always be that perfect, but his track record indicated investors can expect him to hit the mark much more often than not. Michael Breen

Exchange-Traded Fund: Vanguard Information Technology ETF VGT
Expense Ratio 0.25% Monthly Premium/Discount Number of Holdings 426 Price/Fair Value 0.84 Assets in Top 10 Holdings 54% Assets in Stocks With Moats 85% 5-Yr Earnings Growth 2.8%

1.0 0.5 0.0 –0.5 –1.0 04 06 08 10

During the past five years, technology stocks typically traded at a 17.5 price/earnings multiple, compared with 15.3 for industrials. Currently, tech trades at about 14.4 times earnings, and industrials trade at 15.7 times. Morningstar analysts also think tech is undervalued, trading at a price/fair value of about 0.82.
1.0 0.5

Vanguard Information Technology ETF VGT offers investors broad exposure to the technology sector, from high-quality large caps all the way down to small cap. By including small caps, it should minimize any potential loss from continued merger-and-acquisition activity. Michael Rawson

Separate Account: Westwood Management Balanced Portfolio
Category World Stock Asset Allocation
Cash US Stock Non US Stock Bond Other

Investment Style 1 Large Value

Avg Market Cap $9,479 mil

Assets in Top 10 Holdings 0.0 47%

Debt/Capital Ratio 53.8

Assets in Bonds 6%

-0.5 -1.0 This separate account’s quality bias has but its profitability measures, such as return served it well over time. Susan Byrne and Mark on equity and net margin, are superior. -1.5 MonthlyMonthlyPremiumDiscount2004-12Discount2007-02Discount2009-04 MonthlyPremiumPremiumDiscount2005-02Discount2007-04Discount2009-06 MonthlyPremiumDiscount2004-01Discount2006-03Discount2008-05Discount2010-07 MonthlyPremiumDiscount2004-02Discount2006-04Discount2008-06Discount2010-08 MonthlyPremiumDiscount2004-03Discount2006-05Discount2008-07 MonthlyPremiumDiscount2004-04Discount2006-06Discount2008-08 MonthlyPremiumDiscount2004-05Discount2006-07Discount2008-09 MonthlyPremiumDiscount2004-06Discount2006-08Discount2008-10 MonthlyPremiumDiscount2004-07Discount2006-09Discount2008-11 MonthlyPremiumDiscount2004-08Discount2006-10Discount2008-12 MonthlyPremiumDiscount2004-09Discount2006-11Discount2009-01 MonthlyPremiumDiscount2004-10Discount2006-12Discount2009-02 MonthlyPremiumDiscount2004-11Discount2007-01Discount2009-03 MonthlyPremiumDiscount2005-01Discount2007-03Discount2009-05 MonthlyMonthlyPremiumPremiumDiscount2007-05Discount2009-07 MonthlyPremiumDiscount2005-03PremiumPremiumDiscount2009-09 MonthlyPremiumDiscount2005-04Discount2007-06Discount2009-08 MonthlyPremiumDiscount2005-05Discount2007-07 Discount2009-10 MonthlyPremiumDiscount2005-06Discount2007-08 Discount2009-11 MonthlyPremiumDiscount2005-07Discount2007-09 Discount2009-12 MonthlyPremiumDiscount2005-08Discount2007-10 Discount2010-01 MonthlyPremiumDiscount2005-09Discount2007-11 Discount2010-02 MonthlyPremiumDiscount2005-10Discount2007-12 Discount2010-03 MonthlyPremiumDiscount2005-11Discount2008-01 Discount2010-04 MonthlyPremiumDiscount2005-12Discount2008-02 Discount2010-05 MonthlyPremiumDiscount2006-01Discount2008-03 Discount2010-06 MonthlyPremiumDiscount2006-02Discount2008-04 MonthlyPremiumPremiumPremiumPremium MonthlyPremiumPremiumPremiumPremium MonthlyPremiumPremiumPremiumPremium MonthlyPremiumPremiumPremiumPremium MonthlyPremiumPremiumPremiumPremium MonthlyPremiumPremiumPremiumPremium MonthlyPremiumPremiumPremiumPremium MonthlyPremiumPremiumPremiumPremium MonthlyPremiumPremiumPremiumPremium MonthlyPremiumPremiumPremiumPremium MonthlyPremiumPremiumPremium MonthlyPremiumPremiumPremium MonthlyPremiumPremiumPremium MonthlyMonthlyMonthly MonthlyMonthlyMonthly MonthlyMonthlyMonthly MonthlyMonthlyMonthly MonthlyMonthlyMonthly MonthlyMonthlyMonthly MonthlyMonthlyMonthly MonthlyMonthlyMonthly MonthlyMonthlyMonthly MonthlyMonthlyMonthly MonthlyMonthlyMonthly MonthlyMonthlyMonthly MonthlyMonthly Freeman keep the portfolio’s bond sleeve Paying less for better companies is a recipe anchored in high-quality debt and Treasuries. for success, and this separate account On the stock side, they make contrarian has delivered in spades over time. There’s bets on firms with solid fundamentals. So, the no reason to think it won’t maintain its portfolio’s price measures and debt levels winning ways. Michael Breen are well below the moderate-allocation norm,

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50 Morningstar Advisor October/November 2010



Morningstar Advisor - October/November 2010

Table of Contents for the Digital Edition of Morningstar Advisor - October/November 2010

Morningstar Advisor - October/November 2010
Contents
New on MorningstarAdvisor.com
Contributors
Letter From the Editor
What estate-planning strategies are you and your clients doing before the end of the year?
Next Steps for ETFs
Investment Briefs
Taking It Personal
A Model Practice
Find the Right Fit
Will REITs Put You in the Penthouse?
Prepare for the Worst
Tips for Common Family Situations
Might Makes Right
Built to Last
Four Picks for the Present
Tactical Strategies Miss Their Mark
Time to Hop on the Commodities Bandwagon?
Retailers Balance Caution and Catalysts
In Search of … Recession Survivors
Turmoil-Tested Small-Cap Funds
Mutual Fund Analyst Picks
50 Most Popular ETFs
Undervalued Stocks With Wide Moats
VA Sales Rise in Second Quarter
The Third Rail
Morningstar Advisor - October/November 2010 - Intro
Morningstar Advisor - October/November 2010 - Morningstar Advisor - October/November 2010
Morningstar Advisor - October/November 2010 - Cover2
Morningstar Advisor - October/November 2010 - 1
Morningstar Advisor - October/November 2010 - 2
Morningstar Advisor - October/November 2010 - Contents
Morningstar Advisor - October/November 2010 - 4
Morningstar Advisor - October/November 2010 - 5
Morningstar Advisor - October/November 2010 - New on MorningstarAdvisor.com
Morningstar Advisor - October/November 2010 - 7
Morningstar Advisor - October/November 2010 - Contributors
Morningstar Advisor - October/November 2010 - Letter From the Editor
Morningstar Advisor - October/November 2010 - What estate-planning strategies are you and your clients doing before the end of the year?
Morningstar Advisor - October/November 2010 - 11
Morningstar Advisor - October/November 2010 - Next Steps for ETFs
Morningstar Advisor - October/November 2010 - 13
Morningstar Advisor - October/November 2010 - Investment Briefs
Morningstar Advisor - October/November 2010 - 15
Morningstar Advisor - October/November 2010 - 16
Morningstar Advisor - October/November 2010 - 17
Morningstar Advisor - October/November 2010 - Taking It Personal
Morningstar Advisor - October/November 2010 - 19
Morningstar Advisor - October/November 2010 - A Model Practice
Morningstar Advisor - October/November 2010 - 21
Morningstar Advisor - October/November 2010 - Find the Right Fit
Morningstar Advisor - October/November 2010 - 23
Morningstar Advisor - October/November 2010 - 24
Morningstar Advisor - October/November 2010 - 25
Morningstar Advisor - October/November 2010 - Will REITs Put You in the Penthouse?
Morningstar Advisor - October/November 2010 - 27
Morningstar Advisor - October/November 2010 - 28
Morningstar Advisor - October/November 2010 - 29
Morningstar Advisor - October/November 2010 - 30
Morningstar Advisor - October/November 2010 - 31
Morningstar Advisor - October/November 2010 - Prepare for the Worst
Morningstar Advisor - October/November 2010 - 33
Morningstar Advisor - October/November 2010 - 34
Morningstar Advisor - October/November 2010 - 35
Morningstar Advisor - October/November 2010 - Tips for Common Family Situations
Morningstar Advisor - October/November 2010 - 37
Morningstar Advisor - October/November 2010 - Might Makes Right
Morningstar Advisor - October/November 2010 - 39
Morningstar Advisor - October/November 2010 - 40
Morningstar Advisor - October/November 2010 - 41
Morningstar Advisor - October/November 2010 - 42
Morningstar Advisor - October/November 2010 - 43
Morningstar Advisor - October/November 2010 - 44
Morningstar Advisor - October/November 2010 - 45
Morningstar Advisor - October/November 2010 - Built to Last
Morningstar Advisor - October/November 2010 - 47
Morningstar Advisor - October/November 2010 - 48
Morningstar Advisor - October/November 2010 - 49
Morningstar Advisor - October/November 2010 - Four Picks for the Present
Morningstar Advisor - October/November 2010 - 51
Morningstar Advisor - October/November 2010 - Tactical Strategies Miss Their Mark
Morningstar Advisor - October/November 2010 - 53
Morningstar Advisor - October/November 2010 - 54
Morningstar Advisor - October/November 2010 - 55
Morningstar Advisor - October/November 2010 - 56
Morningstar Advisor - October/November 2010 - 57
Morningstar Advisor - October/November 2010 - Time to Hop on the Commodities Bandwagon?
Morningstar Advisor - October/November 2010 - 59
Morningstar Advisor - October/November 2010 - 60
Morningstar Advisor - October/November 2010 - Retailers Balance Caution and Catalysts
Morningstar Advisor - October/November 2010 - 62
Morningstar Advisor - October/November 2010 - 63
Morningstar Advisor - October/November 2010 - 64
Morningstar Advisor - October/November 2010 - 65
Morningstar Advisor - October/November 2010 - In Search of … Recession Survivors
Morningstar Advisor - October/November 2010 - 67
Morningstar Advisor - October/November 2010 - Turmoil-Tested Small-Cap Funds
Morningstar Advisor - October/November 2010 - 69
Morningstar Advisor - October/November 2010 - Mutual Fund Analyst Picks
Morningstar Advisor - October/November 2010 - 71
Morningstar Advisor - October/November 2010 - 72
Morningstar Advisor - October/November 2010 - 73
Morningstar Advisor - October/November 2010 - 50 Most Popular ETFs
Morningstar Advisor - October/November 2010 - 75
Morningstar Advisor - October/November 2010 - Undervalued Stocks With Wide Moats
Morningstar Advisor - October/November 2010 - 77
Morningstar Advisor - October/November 2010 - VA Sales Rise in Second Quarter
Morningstar Advisor - October/November 2010 - 79
Morningstar Advisor - October/November 2010 - The Third Rail
Morningstar Advisor - October/November 2010 - Cover3
Morningstar Advisor - October/November 2010 - Cover4
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