Morningstar Runs the Numbers

Inspired by Harper's Index (with a tip of the hat to FiveThirtyEight's Significant Digits blog), Morningstar Runs the Numbers uses a numbers-based approach to highlight recent Morningstar research, along with some outside news stories.

5% or 6%

In her article highlighting four top funds for investing in emerging-markets debt, Christine Benz notes that yields are still appealing:

Emerging-markets bonds have been on a tear so far in 2016, with the typical fund in the emerging-markets bond fund group gaining nearly 8% for the year to date through late June. That rally has sent yields in emerging-markets bonds down a bit, but they're still relatively attractive--in the neighborhood of 5% or 6% for many emerging-markets bond funds currently.

$22 From Bridget Weishaar's Stock Strategist report--no more moat for Gap and a much lower fair value estimate of its share price:

We no longer think brand strength can deliver pricing power for Gap GPS, and we don't believe the company will obtain its targeted cost advantages; therefore, we have lowered our economic moat rating to none from narrow. We also have reduced our fair value estimate to $22 per share from $38 to reflect our belief that management's failure to institute a responsive supply chain will result in continued market share losses and limited possibility of margin recovery.

5,300 revolutions per minute That's how fast the ball spins when Roger Federer connects on a backhand shot.

90% of brilliance or incompetence John Rekenthaler quotes Grantham in his piece on the challenges of analyzing fund performance:

The difficulty of conducting such work, on a mass scale, spurred GMO's Jeremy Grantham to state, "90% of what passes for brilliance or incompetence in investing is the ebb and flow of investment style." That is, most manager selection consists of investing by accident.

1,926 ETPs Ben Johnson examines the exchange-traded product landscape:

Of the 1,926 ETPs in existence today, the top 100 of them as measured by assets under management account for 74% of total ETP assets. These funds share the hallmark characteristics of the ETF "brand": They are generally low-cost, liquid, and tax-efficient vehicles offering broad asset-class exposure. The average fee among these top 100 is 0.22% (0.19% on an asset-weighted basis). The average fee for the remaining 1,826 is 0.55% (0.44% on an asset-weighted basis). The median number of shares of each of the top 100 ETPs that have traded hands on a daily basis during the past three months was 1.6 million. The comparable figure for the remainder of the universe was just over 21,000.

74 basis points Russ Kinnel on his Mind the Gap study for 2016:

For the 10 years ended December 2015, the investor returns gap shrank from the average over recent years. For U.S. equity funds, the gap was 74 basis points, but international funds had a much wider gap of 124 basis points. Municipal-bond funds continue to be the most confounding group, with a big 132-basis-point gap, while taxable-bond funds had a more moderate 82-basis-point gap. As usual, allocation investors fared the best, with a gap of just 17 basis points.

You can download the full research report here.

More than 8% Iceland has a population of just 331,000 yet Icelanders bought nearly 27,000 tickets for the European Championship.

5 questions Christine Benz responds to readers' questions about the "bucket approach" to portfolio planning for retired investors:

Q: Should I spend my cash out of bucket 1 to defray my living expenses, or only tap the cash in extreme markets?

A: In my bucket portfolio stress tests, I've assumed that the cash in bucket is used on an ongoing basis to fund regular outlays. Cash is then replenished at the end of the year with income distributions and/or the proceeds from trimming appreciated positions (rebalancing).

1644 According to Edward Tufte, that's the year the first known statistical graphic appeared in print.

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