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.

1% to 1.25% The Federal Reserve raised its target fed funds rate a quarter point, to a range of 1% to 1.25% from 0.75% to 1.00%. The rate hike was somewhat inevitable, given the market's high expectation that it would happen, said director of economic analysis Bob Johnson. And though the Fed is widely expected to raise rates once more in 2017, the economy may not be strong enough to support it, in Johnson's opinion.

"My personal belief is we will not have another rate increase this year. I think that the economy is slowing on many sectors, and I think the ability of them to raise rates will be relatively limited. I don't know if it will be entirely clear by their next September meeting how much things have slowed, but I think it's more likely they'll begin on their balance sheet process rather than do an interest rate hike. If they do an interest rate hike--which I don't think they will--but it'd be more likely to me that it happens in December."

6 The typical investor paid lower fund expenses in 2016 than ever before, according to a report by our manager research analysts. This decline is a positive trend for investors, as mutual fund costs have a direct impact on the future value of investors' portfolios, said director of manager research Russ Kinnel. In this article, he examines six Morningstar Medalist funds that have had significant fee reductions.

10 After years of strong gains, U.S. stock valuations look stretched. Many investors in search of compelling bargains have turned their attention abroad. To look for high-quality companies at bargain prices, we combed the Morningstar Global ex-US Moat Focus Index looking for foreign stocks trading at low price/fair value ratios. We further narrowed that list to securities that were available to purchase on U.S. exchanges. These 10 stocks made the cut.

300 Don't underestimate your liver. An article in The New York Times this week extols the human liver, saying that although it looks like a "giant blob" or a "beached sea lion," it's a vital control tower in our body.

"The liver's to-do list is second only to that of the brain and numbers well over 300 items, including systematically reworking the food we eat into usable building blocks for our cells; neutralizing the many potentially harmful substances that we incidentally or deliberately ingest; generating a vast pharmacopoeia of hormones, enzymes, clotting factors and immune molecules; controlling blood chemistry; and really, we're just getting started."

7 upgrades, 12 downgrades May was a busy month for Morningstar Analyst Rating changes, with seven upgrades and 12 downgrades. Our manager research team also initiated coverage on over 90 funds, including a number of new Morningstar Medalists.

3 Despite rising valuations in the equity market during the quarter, some managers running Morningstar Medalist funds were able to find opportunity. Managers from Artisan, Glenmede, T. Rowe Price, and Sound Shore added these three large-cap stocks from the energy, healthcare, and technology sectors.

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