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Commentary

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.

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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 (AMT) 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 (AAPL) 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 (OAKIX) and  Dodge & Cox International Stock (DODFX) 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 (IAU) and  SPDR Gold Shares (GLD) 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. 

Jeremy Glaser does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.