Video Reports

Embed this video

Copy Code

Link to this video

Get LinkEmbedLicenseRecommend (-)Print
Bookmark and Share

By Christine Benz and Shannon Zimmerman | 07-11-2013 03:30 PM

Hard to Be Upset About Stocks

U.S. and most foreign equities saw strong growth during the first half of 2013, but this healthy bull market could be a ripe time for investors to rebalance their portfolios.

Christine Benz: Hi. I’m Christine Benz for Despite some gyrations toward the end of the second quarter, stock funds are having a very good year so far in 2013. Joining me to provide some color on recent stock-fund performance is Shannon Zimmerman. He is associate director of fund analysis with Morningstar.

Shannon, thank you so much for being here.

Shannon Zimmerman: Good to be with you, Christine.

Benz: Shannon, let’s talk about domestic equity to start. Last year I think it was sort of across the board in terms of strength. This year you note that are a few more gradations, that there have been stronger pockets and weaker pockets, but strong performance overall.

Zimmerman: Exactly right. It would be tough to be a disappointed investor in the environment that we’ve had so far year to date in 2013. But exactly right, there have been gradations across market-cap ranges in particular on the domestic-equity side. So if you look at Morningstar’s diversified domestic-equity categories that are divvied up in terms of market cap and valuation spectrum, all of our small-cap categories are at the top of the performance table, beginning with small-cap growth.

The gradations between the small-cap peer group is quite small. They’re all up about 20%; small growth is slightly ahead of its rivals, small blend and small value. As you look down, mid-cap almost to a category is at a second tier, and then large cap at the very bottom. But still large-cap growth is the weakest-performing domestic-equity category, and it’s up 15% on the year. So, it’s hard to be a disappointed investor, I say.

Benz: How about the value-to-growth spectrum, are you seeing that kind of gradation there, as well?

Zimmerman: No, no, not at all, and certainly not nearly as dramatically as you see it in terms of market cap and the impact that has had. If you look at the small cap group, exactly right, small growth is at the top of the list, but only marginally so. But down the spectrum, to the large-cap categories, large growth is at the very bottom of the category, and it’s kind of mixed up in between. There is no clear rhyme or reason in terms of what’s outperformed as gauged by valuation.

Read Full Transcript

{0}-{1} of {2} Comments
{0}-{1} of {2} Comment
  • This post has been reported.
  • Comment removed for violation of Terms of Use ({0})
    Please create a username to comment on this article