These days, investors may well find that their list of worries is long and growing: Slow global growth, a slumping stock market, meager bond yields, and eventual interest-rate hikes all loom large.But there’s another risk that investors should have on their radars: the risk of a big taxable distribution from one of their mutual funds.…
Running a mutual fund, like running any business, has certain costs associated with it, and every party that performs a function along the line needs to get paid somehow. But as Morningstar’s John Rekenthaler and Paul Ellenbogen recently pointed out, fund prospectuses often paint those expenses in very broad strokes, and reporting methods vary; for…
It’s back! After a five-year hiatus, Morningstar’s Fund Family 150 Digest is back to help investors evaluate the largest fund families in the US. The 2024 edition illustrates the ways the asset-management industry is evolving through topics like exchange-traded fund exposure, alternative fund offerings, and women portfolio managers. It also features classic due diligence considerations…
Over the past 12 months, the Morningstar US Growth Index boasted a return of 21.49% versus 14.56% for the Morningstar US Value Index. Given the sizable performance gap between the two styles, many (including Morningstar’s chief US market strategist David Sekera) argue that value stocks currently look like a better opportunity than growth stocks.“Investor enthusiasm…
The 60/40 portfolio is back at all-time highs after a tumultuous stretch that started in 2022. The Morningstar US Moderate Target Allocation Index, which resembles a typical diversified balanced fund, has gained more than 6.3% for the year to date through mid-June, and despite continued pessimism from some market observers, the outlook isn’t as grim…
Large-growth funds posted strong gains in 2024, thanks partly to the artificial intelligence boom. Despite slipping in December, the average large-growth fund beat the broader market last year.To screen for the top-performing funds in this category, we looked for those with the best returns over the last one-, three-, and five-year periods. Among large-growth funds,…
Dividend stocks are the Dolly Parton of investing: Everyone seems to like them.Many retirees rely (at least somewhat) on the regular income that dividend stocks generate. Nonretirees, meanwhile, enjoy “getting paid to wait”—collecting regular income from quarterly dividends while holding on for stock price appreciation.Looking back at 2024, the returns of the Morningstar Dividend Yield…
Index funds are passive investments. They track an index with the aim of replicating that index’s performance minus expenses. Active funds, meanwhile, are led by managers who choose particular securities to outperform an index.However, some index funds are better than others. The best index funds closely track their indexes, minimize costs, and follow sensible rules-based…
In many ways, exchange-traded funds are an evolution of mutual funds. ETFs are like mutual funds that trade throughout the day but are more tax-efficient, transparent, and accessible. And they are often cheaper than their mutual fund forebears.But these advantages don’t apply to every ETF. Some purported benefits of ETFs are oversold, while others are…