What You Missed
This week, we take a closer look at newly undervalued stocks, top wealth creators in the fund industry, Vanguard fund upgrades, capital gains distributions, and new environmental. social, and governance rules for retirees.
Chart of the Week
While the market has stabilized in recent weeks, stocks including Airbnb and Palo Alto Networks have fallen into undervalued territory.
Glossary Term of the Week
A bond is an investment that pays a fixed rate of return through interest or dividend income. They’re often used to balance equity risk, provide income, and hedge against inflation.
In a time of rising interest rates and inflation, here’s what you need to know about what buying bonds can do for your portfolio.
What to Watch
Despite poor returns for most funds this year, many are distributing capital gains.
Articles We Love
Plans should treat sustainability as any other relevant factor, based on the fiduciary standards of prudence and loyalty.
The U.S. Labor Department finalized a rule last week that will remove barriers, real and perceived, to environmental, social, and governance investing in retirement plans governed under the Employee Retirement Income Security Act of 1974, or Erisa.
Called “Prudence and Loyalty In Selecting Plan Investments and Exercising Shareholder Rights,” the new rule replaces two hastily drawn rules rushed to the finish line at the end of the Trump administration. Those rules were widely interpreted as discouraging retirement plan fiduciaries from considering ESG factors and from exercising shareholder rights.
These mutual funds and ETFs have generated the most value for shareholders in dollar terms
To get a better sense of which funds have created the most value in dollar terms, wealth creation is a better measure. To home in on this, I ranked Morningstar’s database of U.S.-based mutual funds and exchange-traded funds, focusing on those that had the biggest increase in asset size over the 10-year period ended in 2021 after subtracting out total inflows and outflows over the same period. The resulting number reflects how much growth a fund has created from market appreciation in dollars.
Russ Kinnel highlights three funds you won’t want to miss.
These Vanguard funds earn a Morningstar Analyst Rating of Silver or Gold.
- Vanguard Short-Term Inflation-Protected Securities Index VTAPX
- Vanguard Extended Market Index VEXAX
- Vanguard Global Wellesley Income VGYAX
Stocks, Funds, and Exchange-Traded Funds
We believe that Berkshire Hathaway BRK.A/BRK.B, owing to its diversification and lower overall risk profile, offers one of the better risk-adjusted return profiles in the financial-services sector and remains a generally solid candidate for downside protection during market selloffs.
Target-risk strategies are worth reconsidering in light of evolving investor demands. These precursors to target-date portfolios have gained new life as the strategy of choice in the fast-growing model-portfolio market.
After several years of spectacular gains, U.S. growth stocks abruptly reversed course in 2021. Small-growth companies peaked that January, while their large-growth counterparts remained strong for an additional several months. When autumn arrived, however, blue chips also succumbed. For the 12 months from October 2021 through September 2022, the two groups fell together, with small-growth stocks dropping 35.7% and their large-growth cousins 39.4%.
Check out our investing specialists on LinkedIn:
Well, it’s feeling a lot like 2022 is the 2020 of investing years for both stocks and bonds—and especially bonds. (We’ll put aside what that means for a 2021/2023 comparison for now.)
However, sentiment in both the bond and stock markets has been feeling a little bit better lately. The stock market is still down 17% this year, but hey, it’s up about 12% from the bottom. So, is the worst over? I took a look at three signs to watch that could offer some clarity on whether stocks have seen their worst. (And while you’re checking out this story, you’ll see it’s part of our regular Monday Markets Brief series, designed to catch you up on which stocks have been posting big moves and key upcoming events for the market.)
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.