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Fund Spy

Buy the Unloved: 2022 Edition

Big 2021 outflows may signal decent returns in the future for the large-growth, mid-growth, and world large-stock value Morningstar Categories.

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Last year, stocks continued their rebound from March 2020's pandemic-induced crash. Fund investors also bought more equities--mostly through exchange-traded funds--but not all Morningstar Categories saw inflows. There's useful information in that fact for those willing to go against the grain. Since 1994, Morningstar has counseled investors at the start of each year to look to the most shunned fund groups for contrarian investment ideas as part of its ongoing Buy the Unloved study. Shopping among out-of-favor Morningstar Categories has been a decent approach because groups seeing outflows are also often out-of-favor areas that are poised for resurgence.

Christopher Franz does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.