Tue, 25 Nov 2014
How increased merger activity shapes the risks and opportunities for this niche group of mutual funds.
Investors tend to capture more available returns in balanced funds due to a smoother ride.
Boring investments tend to keep people in their seats, which leads to better outcomes, says Morningstar's director of personal finance.
Fears of past market crises have investors selling the category despite its wide margins of safety and outperformance over its blend and value counterparts, says Morningstar's Shannon Zimmerman.
Investors have been putting money back into bond funds as interest rates have unexpectedly dropped this year.
Oakmark International manager David Herro's closure of the fund is a preemptive move to taper asset flows and put shareholders first, says Morningstar's Shannon Zimmerman.
The fund's plain-vanilla focus on company fundamentals allows it to uncover value in any kind of stock and has contributed to its long-term outperformance, says Morningstar's Shannon Zimmerman.
Although major indexes remain elevated, these funds could be good places to put money to work in the present market environment.
Recent Morningstar research shows that while some buys exist across the equity fund universe, many areas, such as dividend-paying stocks , are close to fully valued.
A group of top managers continue to keep looking for good investment opportunities, while taking full advantage of a rising (and potentially overvalued) market to book some gains.
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