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Investing Specialists

Ultimate Stock-Pickers: Top 10 Buys and Sells

Top managers continue to find opportunities for some new-money purchases, while taking full advantage of a rising stock market to book gains in shares trading above their fair value estimates.

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By Greggory Warren, CFA | Senior Stock Analyst

While the growing acceptance and use of 401(k) and other defined contribution programs has smoothed monthly flows for U.S.-based mutual funds, there is still some seasonality left in the system. The first quarter of any given calendar year tends to have a greater level of fund sales and redemption activity than the remaining three quarters of the year, as retail-advised, institutional, and even individual investors in retirement-based plans reallocate their holdings to adjust to current and future expected market conditions. That said, total long-term inflows into U.S.-based mutual funds and exchange-traded funds (ETFs) have been a bit lower the last two years than they were in 2013, as the ongoing rally in the U.S. stock market and growing concerns over rising interest rates have had a greater influence on where money was being put to work. Flows into U.S. Equity funds overall dropped into negative territory this year (losing $17.5 billion to outflows during the period) , with Sector Equity funds picking up a more normalized level of flows (at $16.7 billion), and International Equity funds riding a resurgence in interest in the category, with more than $66.6 billion flowing into funds dedicated to global stocks.

The Morningstar Ultimate Stock-Pickers Team has a position in the following securities mentioned above: C, AXP. Find out about Morningstar’s editorial policies.