How to Use the Morningstar Quantitative Rating Analysis
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Timothy Strauts
Timothy Strauts is head of manager research, North America, for Morningstar.
Prior to assuming his current role in 2022, he was director of quantitative research, funds; a manager on Morningstar’s markets research team; and a senior manager research analyst covering fixed income, financial sector products, and alternatives. Before joining Morningstar in 2010, he was a financial advisor for Smith Barney.
Strauts holds a bachelor’s degree in economics from the University of Illinois at Urbana-Champaign and a master’s degree in business administration from the University of Chicago Booth School of Business.
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Analyzing the Recent Performance of the Morningstar Quantitative Rating for Funds
We check in on our accuracy.
How to Use Our New Factor Tool
The Morningstar Factor Profile helps sort out investment factors.
August Jobs Numbers Likely to Keep Fed at Bay
A middling employment report is unlikely to give the central bank the cover it needs to raise rates in the face of mixed economic data.
Why Vanguard Gets the Lion's Share
The fund firm has been dominating the market with a low-fee promise, and as it gains scale, it becomes even harder to compete with.
After Taxes, Munis Make Sense
Tax-equivalent yields show how muni investing can pay off even for investors of more modest means.
Brexit Shockwaves May Linger
Questions over the U.K.'s separation terms, possible economic fallout, and the future of the EU itself could upset the markets in fits and starts for months to come, says Morningstar markets research analyst Tim Strauts.
The Fed Rate Dance and The Spring Economic Thaw
Two movies we have seen before.
Emerging Markets Still Have Room to Grow
Short-term problems may have slowed growth, but emerging economies are still likely to grow at above-average rates as they close the gap with developed countries.
Investors Missed the Boat After the Financial Crisis
Because they preferred fixed income over U.S. equities in 2009-2012, many investors missed out on the best returns of the bull market.
IMF Finally Sees Slowing Growth Just as Other Signs Turn Positive
Many world-growth indicators have looked better recently; meanwhile, the IMF checks in with yet another reduction in its 2016 forecast.
Investors: Don't Make This Costly Mistake
Our investor return data point illustrates the dangers of performance-chasing.
What Yield Curves Are Telling Us Today
Among Germany, Japan, U.S., and the U.K., only the U.S. yield curve is normal today, supported by low unemployment, positive economic growth, and normalizing Fed policy.
Active-Fund Investors: Do Your Homework
The underperformance of active funds, on average, versus passive means that investors need to aim for the best when choosing to go active.
Backing Out the Energy Effect on High-Yield Bonds
High-yield bonds have been thrown into turmoil because of falling oil prices, but excluding the energy sector, high-yield spreads have only risen slightly.
What History Says About Safe Retirement-Withdrawal Rates
The percentage retirees can draw from their portfolios without running out of money has varied widely depending on the retirement start date.
Diminishing Returns for QE Programs
Of the three major central banks to employ quantitative easing, the Federal Reserve has made the biggest economic impact because it acted first.
The Fastest-Growing Fund Families
PIMCO outflows and the continued growth of ETFs and alternative funds have had a big impact on fund flows this year.
The Biggest Threat to Bond Investors Today
While inflation remains low and the Fed remains unlikely to increase rates dramatically in the next year, defaults pose the biggest threat, says Morningstar's Tim Strauts.
Bondholders' Biggest Threat? It's Not the Fed
Rising interest rates will temporarily hurt bond returns, but high inflation is much more damaging to bond portfolios.
How Fast Do Markets Recover From a Swoon?
Markets bounce back from event-based shocks much faster than big bear-market-related sell-offs.
Pedal to the Metal for Passive Fund Growth
In the coming years, we see passive fund assets reaching parity with active funds.
U.S. Investors Still Favoring Foreign Fare
A lengthy bull market and fear of Fed tightening have investors feeling skittish about U.S. equities, says Morningstar's Tim Strauts.
What Outperforms When Rates Rise?
Real assets, such as commodities, tend to perform better than other asset classes during periods of restrictive monetary policy.
Investors Bet on Europe
Despite the sometimes scary headlines, assets flowed into both international developed-markets and European-stock funds in June.
How Bad Timing Can Bite in Retirement
Starting withdrawals as a bear market hits can seriously impair the sustainability of a retirement portfolio over time.
Investors Flock to Low-Cost Funds
Since 2003, the lowest-cost mutual funds have taken the lion's share of assets as the benefits of low fees became widely recognized and advisors moved away from commission-based accounts.
U.S. Economy: Little Capacity for Long-Term Growth
The U.S. economy is bouncing back from first-quarter headwinds, but in the long run it can't grow more than about 1.5% per year, says David Kelly, chief global strategist for J.P. Morgan Funds.
Rate Hike Talk Not Deterring Bond Investors
Inflows to core bond funds and outflows from U.S. stocks continued in May despite the specter of rising rates, says Morningstar’s Tim Strauts.
'Automatic' Gains for Target-Date Investors
While poor timing decisions continue to drag on investor returns in most fund categories, the data suggest that automatic 401(k) enrollment and dollar-cost averaging have benefited target-date fundholders over time.
When Currency Hedging Doesn't Make Sense
Despite the recent currency-hedging craze, long-term investors would probably get better returns and greater diversification from a traditional unhedged fund when investing abroad.
Investors Increasingly Turning to Overseas Investments
Asset flow data show another month of inflows for foreign-stock funds while U.S. active and even U.S. passive equity funds saw redemptions.
Indexing Fever Spreads
In the years ahead, passive flows will likely top active in the U.S. while continuing to grow in fixed income and international regions.
Investors Go for International-Equity Funds
International-equity funds--particularly currency-hedged funds--were the biggest beneficiaries of new investor dollars in March, continuing a broader trend over the last several years.
The Clear Link Between Fees and Performance
Low-fee funds have given investors the best chance of success over the long term.
The Big, Bad Bite of Taxes and Inflation
Both factors dramatically cut historical stock and bond returns, stressing the importance of tax-advantaged accounts and inflation-beating strategies.
Rate-Hike Fears Not Causing Investors to Shun Bonds
Money continued to flow into intermediate-term bonds in February despite concerns about a rising-rate environment, says Morningstar’s Tim Strauts.
Bargain-Hunters Should Look to Large-Value Stocks
Current market valuations present few attractive buying opportunities, but large-value stocks represent one of the few undervalued areas of the style box.
Dividends: Only Half of the Yield Story
While the S&P 500's dividend yield has hovered around 2%, the more-volatile buyback yield has been consistently higher in recent years, making the total yield near 5%.
Continued Outflows a Yellow Flag at PIMCO
An additional $12.5 billion left PIMCO's flagship Total Return Fund in January, bringing the total outflow to more than $90 billion since Bill Gross' departure.
Index Funds Clean Up (Again) in 2014
Indexing, Vanguard, and equity funds were among the year’s asset gatherers, while taxable-bond funds and PIMCO were on the losing end.
Too Much Risk in Russia
Russian stocks are incredibly cheap, but with serious concerns about rule of law and low oil prices, potential investors risk permanent loss of capital.
How Active and Passive Investors Are Choosing Funds
Passive investors still prefer low-cost vehicles to pricier strategic-beta funds, while active investors are considering relative performance and risk level as well as cost.
Passive Trend Less Pronounced in Bonds
In recent years, passive U.S. equity investments have had strong inflows; however, investors are still finding value in active management for fixed-income holdings.
Penchant for Passive Continues in 2014
Flows into passive U.S. equity funds of all stripes have been strong, as investors continue to show a clear preference toward lower-fee options, says Morningstar's Tim Strauts.
Small-Cap Performance Edge on the Wane
The valuation advantage that small caps have had over the last 14 years is no longer prevalent.
Little Margin of Safety in Today's Markets
Whether you look at equity or fixed-income markets, the investing landscape looks fully valued, says Morningstar's Tim Strauts.
World Valuations Getting More Attractive
Our quantitative valuation ratings are showing the best opportunities are in Asia and emerging markets, while North America is fairly valued.
Passive Funds Keep Attracting Flows
Morningstar's asset flow data for October showed continued preference for index funds. Plus, an update on PIMCO's outflows.
PIMCO Total Return Outflows Slowing, But Still Substantial
PIMCO Total Return is still losing assets on a daily basis, but at a much lower rate than in the immediate wake of Bill Gross’ departure from the firm.