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By Jason Stipp | 03-26-2010 04:17 AM

Five Big Trends for the Quarter End

Senior fund analyst John Coumarianos on small caps' big gains, yield-chasing hazards, active managers getting defensive, and more.

Jason Stipp: I'm Jason Stipp for Morningstar and welcome to a special quarter-end edition of the Friday Five. We're going to look at some winners, losers, and trends over the last quarter.

Morningstar markets editor Jeremy Glaser is on vacation this week. We won't hold that against him because we have John Coumarianos, senior mutual fund analyst with Morningstar, joining us today. John, thanks so much for being here.

Coumarianos: Thanks Jason. Great to be here. I know I have big shoes to fill, but I'll do my best.

Stipp: I'm sure you'll do great. So we're going to look back at a few different trends in the market. Let's start broadly and look back at some broad market trends and see who's coming out winners, who's coming out losers recently in the market.

Coumarianos: Sure. Well, the big trend is that stocks are up again, so we've had really an uninterrupted year from March 9, 2009, up through late March 2010, now where the market has done basically nothing but go up.

For the quarter, the Morningstar US Market Index is up almost 6%: 5.8%. The trend we see underneath that is that it really looks like the beginning part of this decade, where small-cap has outperformed large-cap and value has outperformed growth.

So, for example, although the market itself is up 5.8%, the small value, the Morningstar Small-Cap Value Index is up 12.4% for the quarter. Really just a tremendous return. While the Morningstar Large-Cap Index is up a mere 4.5%. Not too shabby, but when you compare it to that Small-Cap Value Index, it looks low.

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