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Morningstar Select Equity Portfolios

A series of focused separately managed account (SMA) strategies rooted in a valuation-driven investment approach and built for the longterm.

Our Select Equity Portfolios have key elements that exist throughout our portfolio suite.

Valuation-Driven Approach

Value investing seeks to get more than you pay for. To do this, we conduct in-depth fundamental analysis while leveraging the independent research of our parent company, Morningstar, Inc.* For our Select Equity Portfolios, this allows us to evaluate what we believe a business is worth, which we can then compare to its current stock price to determine whether it offers good value.

Focused Selection

Our focused portfolios typically own 20-40 stocks to give investors access to our high conviction stock ideas. Under this approach, we are able to dedicate more of our resources to researching and monitoring the companies we own. This also allows us to better understand the risks and exposures of the total portfolio.

Widening the Moat

We believe companies with sustainable competitive advantages, or moats, should be able to defend or grow their market position through time, which could lead to long-term excess returns.**

Explore Our Select Equity Portfolios

  • Morningstar Hare Portfolio
  • Morningstar Dividend Portfolio
  • Morningstar Tortoise Portfolio
  • Morningstar All-Cap Equity Portfolio
  • Morningstar Small/Mid-Cap Equity Portfolio
  • Morningstar International Equity Portfolio
With a focus on growth at a reasonable price, Hare seeks out companies with strong and improving competitive advantages and above-average earnings per share growth.

Designed for investors who:
  • Want exposure to some of the world's strongest and fastest-growing companies.
  • Have longer time horizons and are willing to take on more risk for potential higher return.
  • Recognize the importance of not overpaying for growth investments.

The Dividend portfolio seeks to provide a robust, reliable, and growing income stream, as well as long-term capital appreciation, by investing in dividend-paying companies.

Designed for investors who:
  • Looking for a high income stream relative to the overall stock market.
  • Would like to diversify their income stream with equities.
  • Want to maintain equity exposure within a defensive approach.

The Tortoise seeks to invest in high-quality companies that have strong balance sheets and durable competitive advantages, using disciplined valuation.

Designed for investors who:
  • Prefer to own high-quality companies with investment grade credit ratings.
  • Value downside protection and preservation of capital.
  • Are looking for a more conservative exposure to equities.

This “go anywhere” strategy seeks undervalued domestic and international stocks across the entire market cap spectrum.

Designed for investors who:
  • Want a portfolio with the flexibility to invest around the globe across all market caps.
  • Are looking to invest in significantly undervalued stocks that may be out of favor.

Over the long-run, research has shown that small and mid-cap stocks have outperformed large caps.2 The Small/Mid-Cap portfolio looks for small to mid-sized firms with competitive niches in their industry.

Designed for investors who:
  • Want to diversify their portfolio with small and mid-cap firms.
  • Are looking to invest in significantly undervalued stocks that may be out of favor.

The strategy seeks undervalued stocks outside of the US, with a willingness to invest across the quality spectrum, through an appreciation for the capital cycle, whilst demanding an appropriate discount.

Designed for investors who:
  • Want exposure to international companies that operate primarily outside of the US.
  • Understand that low industry profits repel capital, reducing investment and creating the potential for improving industry returns.
  • Are looking to invest in significantly undervalued securities that may be out of favor.

Our Investment Insights

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Morningstar® Managed Portfolios℠ are offered by the entities within Morningstar’s Investment Management group, which includes subsidiaries of Morningstar, Inc. that are authorized in the appropriate jurisdiction to provide consulting or advisory services in North America, Europe, Asia, Australia, and Africa. In the United States, Morningstar Managed Portfolios are offered by Morningstar Investment Services LLC or Morningstar Investment Management LLC, both registered investment advisers, as part of a discretionary investment advisory service or as model portfolios to third-party advisory programs on a discretionary or non-discretionary basis. Morningstar Managed Portfolios offered by Morningstar Investment Services LLC or Morningstar Investment Management LLC are intended for citizens or legal residents of the United States or its territories and can only be offered by a registered investment adviser or investment adviser representative. It is important to note that investments in securities (e.g. mutual funds, exchange-traded funds, common stocks) involve risk and will not always be profitable. There is no guarantee that the results of advice, recommendations, or the objectives of your portfolio will be achieved. There is no guarantee that negative returns can or will be avoided in any of Morningstar Managed Portfolios’ portfolios. An investment made in a security may differ substantially from its historical performance and as a result, you may incur a loss. Past performance is no guarantee of future results. Diversification does not eliminate the risk or experiencing investment losses.

*For Morningstar Inc. and it’s subsidiaries: Investment research and ratings are produced and issued by subsidiaries of Morningstar, Inc. including, but not limited to, Morningstar Research Services LLC, registered with and governed by the U.S. Securities and Exchange Commission. Morningstar Investment Services may have different opinions on certain securities.

**The Morningstar Economic Moat Rating is not a credit or risk rating. It is a subjective evaluation performed by the equity research analysts of Morningstar. The Morningstar Economic Moat Rating should not be used as the sole basis in evaluating a security. Morningstar ratings involve unknown risks and uncertainties which may cause Morningstar’s expectations not to occur or to differ significantly from what we expected.

1 Conover, C. M., Jensen, G. J., & Simpson, M. A. W. (2016). What Difference Do Dividends Make? Financial Analysts Journal, 72(6).
2 Source: 2019 SBBI Yearbook

Important Disclosures