Morningstar Advisor - February/March 2013 - (Page 6)

MorningstarAdvisor Contributors Editor-in-Chief Jerry Kerns Editor-at-Large Don Phillips Contributing Editors Dan Culloton, Paul Justice, Haywood Kelly Contributors David Blanchett, Michael Brennan, Greg Carlson, Elizabeth Collins, Beth Foos, Philip Guziec, Michael Herbst, Eric Jacobson, David Krempa, Steven Pikelny, Jeffrey Ptak, Katie Reichart, Carl Richards, Kate Stalter, Shannon Zimmerman, Adam Zoll Data Editors Mnason Chew, Alina Tarlea Proofreaders Ann Marie Gray, Courey Gruszauskas Art Director Alexander Skoirchet Illustrator Gracia Lam Photographers Daymon Gardner, Dustin Grove Daniel Culloton and Michael Herbst Publisher Leslie Marshall Director of Advertising Sales Mary Uribe We often hear that on average active managers don’t beat the market. The key words there are “on average.” That makes sense because the market is essentially an average of all investors combined. Throw in expenses, and you stack the deck against active managers of expensive funds. The job of Michael Herbst, Morningstar’s director of active funds research, and Daniel Culloton, the group’s associate director, is to shine a light on the active managers they believe stand a good chance of beating the market over the long term. That goal drives the Morningstar Analyst Ratings and also triggered a reorganization of the firm’s fund research team in 2012. Analysts are now aligned along strategies—active, passive, fund of funds, and alternatives— rather than vehicles. Herbst and Culloton write about active investing is in this issue’s Spotlight (Page 34). Regional Sales Directors Dan Atkinson, Tony Lignelli, Kristina Niemi, Stuart Roge Morningstar, Inc. Chairman and CEO Joe Mansueto Managing Director, Design David Williams Director, Corporate Marketing Kristin Mateja How to Reach Morningstar Advisor Subscriber Services and Circulation Editorial and Letters to the Editor Advertising Rate card available at Reprints and Licensing 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. © 2013 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. 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 Gracia Lam The theme of this issue, active investing, reminded illustrator Gracia Lam of the folktale “The Tortoise and the Hare.” “The account of a race between the two partners directly reflects on the argument between index and active investors,” she says. “The analysis that lies within the Spotlight articles, as well as my illustrations, 6 Morningstar Advisor February/March 2013 investing in ETFs and ETNs that are based on Morningstar indexes. shed light on the attributes of both parties.” Lam also illustrated the October/November 2010 issue. She was born in Hong Kong and raised in Toronto, and she calls those cities home today. Her work has been recognized by The Art Directors Club’s Young Guns 8, American Illustration, 3x3 magazine, and Applied Arts. 1372338

Table of Contents for the Digital Edition of Morningstar Advisor - February/March 2013

Morningstar Advisor - February/March 2013
Letter From the Editor
Social Media, the Old- Fashioned Way
Do You Use Active Strategies?
Youth Appeal
How to Buy the Unloved 2013
Morningstar Managers of the Year
Investments á la Carte
Investment Briefs
Approaches to Absolute-Return Investing
In Agriculture, It’s Good to Be Strong
Yes, There Are Good Active Funds
The Decoupling
Where It Could Pay to Be Active
The Active Fund That Defies Obsolescence
The Epitome of an Active Manager
Lines of Communication
The Existence of Market Timing ‘Intelligence’
A Route to Commodities that Bypasses the Futures Market
Best Positioned for Health-Care Reform
Diversified Stock Funds That Earn Their Stars
Our Favorite Mutual Funds
50 Most-Popular Equity ETFs
Undervalued Stocks With Wide Moats
A Twisted Debate

Morningstar Advisor - February/March 2013