Morningstar Advisor - June/July 2012 - (Page 6)
Editor-in-Chief Jerry Kerns Editor-at-Large Don Phillips Contributing Editors Dan Culloton, Paul Justice, Haywood Kelly Contributors Philip Bader, Greg Carlson, Elizabeth Collins, Philip Guziec, David Krempa, Samuel Lee, Kailin Liu, Laura Pavlenko Lutton, Alex Morozov, Patricia Oey, Jeffrey Ptak, Carl Richards, Miriam Sjoblom, Christina West Data Editors Mnason Chew, Preethi Parmar, Alina Tarlea Proofreader Jennifer Gierat Art Director Alexander Skoirchet Illustrator Brian Stauffer Photographer Guillaume Megevand Publisher Leslie Banks Director of Advertising Sales Mary Uribe
Kailin Liu, Laura Pavlenko Lutton, and Christina West
On the heels of the mutual fund industry’s market-timing scandal in 2004, Morningstar launched its Stewardship Grades. That episode demonstrated that some firms can get so focused on raising their assets that they harm the fundholders that they already have. “The best stewards of capital are funds that treat you like an owner of their business, and advisors—who’ve entrusted their practices to the funds in their clients’ portfolios—should relate to that,” says Laura Pavlenko Lutton, who is an editorial director in Morningstar’s fund research group. Lutton heads up the group of analysts, which includes Christina West and Kailin Liu, that focuses on stewardship issues. “We’ve found that good stewards are more likely to survive, charge lower fees, and turn in better risk-adjusted returns,” Lutton says. The team’s latest research on fund stewardship is on display in this issue’s Spotlight section (Page 36).
Regional Sales Directors Dan Atkinson, Tony Lignelli, Kristina Niemi, Stuart Roge Morningstar, Inc. Chairman and CEO Joe Mansueto President, Equity and Credit Research Group Catherine Odelbo Sr. Vice President, Financial Communications Business Mike Barad Managing Director, Design David Williams How to Reach Morningstar Advisor Subscriber Services and Circulation firstname.lastname@example.org Editorial and Letters to the Editor email@example.com Advertising firstname.lastname@example.org Rate card available at http://advisor.morningstar.com/products/advisormagazine.asp Reprints and Licensing email@example.com How to Reach Morningstar Customer Service +1 312 384-4000 Advisor Product Sales +1 877 586-5405 Data Questions +1 312 696-6600
Morningstar Advisor is published bimonthly by Morningstar, Inc., 22 W. Washington St., Chicago, IL 60602. An annual subscription for delivery in the U.S. is $60. All exhibit data in this magazine is provided by Morningstar and Ibbotson Associates unless otherwise noted. © 2012 Morningstar. All Rights Reserved. The information contained herein: (1) is intended solely for informational purposes; (2) is proprietary to Morningstar and/or its content providers; (3) may not be copied or distributed; (4) is not warranted to be accurate, complete, or timely; and (5) does not constitute investment advice of any kind. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. “Morningstar” and the Morningstar logo are registered marks of Morningstar, Inc.
Elizabeth Collins, CFA, leads the basic materials team within Morningstar’s equity research department. She helped revamp Morningstar’s Stewardship Rating for stocks, which places a new emphasis on how well a company allocates capital. She details the new methodology of the rating, which launched May 1, in “Stewardship Goes Back to the Fundamentals” (Page 44).
Brian Stauffer’s illustrations are best known for their conceptual take on social issues. His images are in the permanent collections of the Wolfsonian, the Museum of the Society of Illustrators, the American Institute of Graphic Artists, and the Newseum in Washington, D.C. He won the prestigious 2011 Gold Award for Best Cover Illustration from the Society of Publication Designers.
Disclosure: Morningstar licenses its indexes to certain providers, including Blackrock Institutional Trust Company, N.A., First Trust, and Deutsche Bank, for use in exchange-traded funds and exchange-traded notes. These ETFs and ETNs are not sponsored, endorsed, issued, or sold by Morningstar. Morningstar does not make any representation regarding the advisability of investing in ETFs and ETNs that are based on Morningstar indexes.
Morningstar Advisor June/July 2012
Table of Contents for the Digital Edition of Morningstar Advisor - June/July 2012
Morningstar Advisor - June/July 2012
Letter From the Editor
Be Worth Remarking About
How Important Is Stewardship?
From West Point to Points East
Where a Fund’s Secrets Lie
Getting Fund Directors on Board
Managers Prep for Housing Rebound
Four Picks for the Present
A Hedge Against Career Risk
Natural Gas Reaches Capitulation
How Good Stewardship Predicts Superior Performance
Stewardship Goes Back to the Fundamentals
On the Go for Fixed Income
Where Shareholders Ride First Class
Dangers Lurk in Exchange-Traded Notes
Stocks on Sale in a Strong Market
A Good Steward Is Easy to Find
Our Favorite Mutual Funds
50 Most Popular ETFs
Undervalued Stocks With Wide Moats
Buffett Rule’s Biggest Losers
Morningstar Advisor - June/July 2012