What Investors Were Researching in August
The Fed's taper dominated the headlines in August, but investors were looking for undervalued stocks, yield, and international opportunities.
The Fed's taper dominated the headlines in August, but investors were looking for undervalued stocks, yield, and international opportunities.
After rebounding in July, the market took a turn in August as worries about the Fed's taper dominated. The broad-based Morningstar US Market Index lost more than 3% in the month.
Decent, but far from spectacular, economic reports in the month did little to ease worries that the Fed is planning to pull back on its quantitative easing programs as soon as September. Morningstar director of economic analysis Bob Johnson described the reports as the "perfect storm" to hit both stocks and bonds. But the reports were generally strong enough that the Fed feels it has the cover to taper its purchases, but not so strong that the market could ignore the impact of rising rates. And rates did keep rising. The 10-year Treasury note was yielding 2.78% at the end of the month, up slightly from 2.74% at the beginning of August and considerably higher than the sub-2% rates seen just a few months ago.
The news out of Europe was generally better-than-expected. Strong growth in Germany seemed to have pulled the eurozone out of recession. The underlying debt and currency woes remained, but a growing economy is a sign that Europe may have the space it needs to tackle its competitiveness issues. Decent export data from China also eased fears that emerging markets were on the verge of a significant slowdown.
Against this backdrop, what were investors checking out on Morningstar.com during the month? Below are the 25 most-viewed stock, mutual fund, and exchange-traded fund Analyst Reports in August.
Most Viewed Stock Analyst Reports in August 2013 | ||||
Name | Ticker | Moat | Star Rating | August Return |
American Tower | AMT | Narrow | -1.8% | |
Apple | AAPL | Narrow | 8.3% | |
Berkshire-Hathaway | BRK.A | Wide | -4.0% | |
Potash Corp | POT | Wide | 2.2% | |
General Electric | GE | Wide | -5.0% | |
Transocean | RIG | Narrow | -3.1% | |
J.C. Penney | JCP | None | -14.5% | |
Enbridge | ENB | Wide | -7.2% | |
American Elec Power | AEP | Narrow | -6.6% | |
IBM | IBM | Wide | | -6.1% |
Exxon Mobil | XOM | Wide | -6.4% | |
Apache | APA | Narrow | | 6.8% |
Intel | INTC | Wide | | -4.8% |
Johnson & Johnson | JNJ | Wide | -6.9% | |
National Oilwell Varco | NOV | Wide | 5.9% | |
ITC Holdings | ITC | Wide | | -2.7% |
Gilead Sciences | GILD | Narrow | -1.8% | |
Procter & Gamble | PG | Wide | -3.0% | |
Canadian Natural Res | CNQ | Narrow | -1.3% | |
Cenovus Energy | CVE | Narrow | -2.9% | |
Chevron | CVX | Narrow | -3.5% | |
ArcelorMittal | MT | Narrow | -1.6% | |
Spectra Energy | SE | Wide | -7.2% | |
Yamana Gold | AUY | None | 8.4% | |
Suncor Energy | SU | Narrow | 7.7% | |
Source: Morningstar, Return Data as of Aug. 31, Star Ratings as of Sept. 5. |
Many firms from the energy and basic materials sectors were among the most researched last month. This isn't too surprising given that Morningstar's equity analysts consider these two sectors the most undervalued today. American Tower took the most researched spot this month, as investors showed interest in one of the few moat stocks that had a Morningstar Rating of 5 stars. Apple remained near the top of the most researched list after shares rose on news that activist investor Carl Icahn was pushing the company to buy back more stock.
Most Viewed Open-End Fund Analyst Reports in August 2013 | ||||
Name | Ticker | Morningstar Category | Star Rating | August Return |
Oakmark Intl | OAKIX | Foreign Lg Blend | -1.8% | |
Vanguard Wellington | VWELX | Mod Allocation | -2.2% | |
Vanguard Div Growth | VDIGX | Large Blend | -2.6% | |
Dodge & Cox Intl Stk | DODFX | Foreign Lg Blend | -2.9% | |
T. Rowe Cap App | PRWCX | Mod Allocation | -1.9% | |
T. Rowe Equity Inc | PRFDX | Large Value | -3.1% | |
Dodge & Cox Bal | DODBX | Mod Allocation | -2.0% | |
Vanguard Cap Opp | VHCOX | Large Growth | -2.1% | |
Vguard Selectd Value | VASVX | Mid-Cap Value | -1.8% | |
PCAP Oddsy Agg Grth | POAGX | Mid-Cap Growth | -0.1% | |
Dodge & Cox Stock | DODGX | Large Value | -2.8% | |
Vguard Wellesley Inc | VWINX | Cons Allocation | -1.9% | |
PRIMECAP Odssy Stk | POSKX | Large Blend | -1.9% | |
Fidelity Sm Cap Discov | FSCRX | Small Blend | -3.0% | |
Artisian Intl Value | ARTKX | Foreign Lg Blend | -0.7% | |
FPA Crescent | FPACX | Mod Allocation | -1.2% | |
Mairs & Power Grth | MPGFX | Large Blend | -3.4% | |
Dodge & Cox Income | DODIX | Interm-Term Bond | -0.5% | |
Fidelity Contrafund | FCNTX | Large Growth | -1.5% | |
TRP Short-Term Bond | PRWBX | Short-Term Bond | -0.3% | |
Met West Ttl Rtn Bnd | MWTRX | Interm-Term Bond | -0.4% | |
Vanguard Bal Index | VBINX | Mod Allocation | -2.0% | |
Berwyn Income | BERIX | Cons Allocation | -0.2% | |
Sequoia | SEQUX | Large Growth | -1.4% | |
Yacktman | YACKX | Large Blend | -2.0% | |
Source: Morningstar, Data as of Aug. 31, Star Ratings as of Sept. 5. |
Investors showed interest in foreign equities in August with both Oakmark International and Dodge & Cox International Stock landing in the top five. Equity-focused portfolios dominated the most researched mutual funds with only a handful of fixed-income and allocation funds making the cut.
Most Viewed ETF Analyst Reports in August 2013 | ||
Name | Ticker | August Return |
Vanguard Dividend Appreciation | VIG | -3.4% |
Vanguard High Div Yield | VYM | -3.9% |
Vanguard FTSE Europe | VGK | -1.3% |
WisdomTree Emerg Mkt Sm Cp Div | DGS | -4.4% |
Vanguard FTSE Emerg Markets | VWO | -3.1% |
Vanguard REIT Index | VNQ | -6.9% |
Vanguard Total Stock Market | VTI | -2.8% |
Shares Gold Trust | IAU | 6.0% |
PowerShares Senior Loan Port | BKLN | -0.4% |
Vanguard Total Inl Stock | VXUS | -1.7% |
Vanguard FTSE All-World ex-US | VEU | -1.7% |
iShares Nasdaq Biotech | IBB | -2.1% |
iShares S&P U.S. Pref Stock | PFF | -1.9% |
WisdomTree Emerg Mkt Equity | DEM | -0.6% |
WisdomTree Small Cap Div | DES | -5.0% |
ALPS Alerian MLP | AMLP | -1.4% |
Vanguard Value | VTV | -3.6% |
iShares MSCI Emerg Market Min Vol | EEMV | -3.4% |
PIMCO Enchanced Short Maturity | MINT | 0.0% |
PowerShares FTSE RAFI US 1000 | PRF | -3.4% |
PowerShares FTSE RAFI US 1500 | PRFZ | -3.3% |
SPDR Dow Jones Global Real Estate | RWO | -5.2% |
iShares MSCI EAFE | EFA | -5.2% |
JPMorgan Alerian MLP Index | AMJ | -2.5% |
SPDR Gold Shares | GLD | 6.1% |
Source: Morningstar, Data as of Aug. 31. |
The continued search for income was very evident among the most researched ETFs in August. Three out of the top four researched securities were dividend funds. The strong performance of gold funds didn't go unnoticed in the month, with both
iShares Gold Trust and SPDR Gold Shares landing in the top 25. There was also continued interest in less mainstream asset classes such as master limited partnerships, bank loans, and commercial real estate.
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