Morningstar: Closed-end Funds Coming Soon

What’s New

There are many new and exciting changes coming to Morningstar Investment Research Center this month!

  • First, you will notice recently improved pages for viewing exchange-traded funds (ETFs). Overall, you will see that the pages include larger, easier-to-read fonts and graphs with additional data points and a more user-friendly interface. The new ETF Quote pages provide a comprehensive overview of the ETF you are viewing, complete with interactive graphs, important price data, style map, sector information, and several other highlights. Just like our stock and fund pages, there is now a Chart tab where users can compare one ETF to another fund or benchmark. And similar to the mutual funds, you can find related fund family data by clicking the link at the top right of each page.
  • They have also updated the Portfolio X-Ray Tool to help investors better understand the types of sectors they are invested in. Now, in the Stock Sector section of the tool, users will see industry sectors, such as health care and technology, divided into three new categories: cyclical, sensitive, and defensive. These three divisions indicate how sensitive the industries are to macroeconomic factors. Investors can clearly see how their portfolio is divided amongst these three broader categories and the 11 industry sectors.
  • Starting in mid-August, you will notice a new area on the Morningstar Investment Research Center. For the first time, they are offering detailed data on closed-end funds (CEFs). The CEF pages have the same look and feel as the other fund analyses, while allowing investors to learn about a whole new segment of funds. To learn more about CEFs, check out the CEF summary in the Glossary and Methodologies section of the Help & Education tab.

Wall Street Doesn’t Take the Summer Off, and You Shouldn’t Either

Wall Street in 1850

Image by paukrus via Flickr

Consider what the condition of your yard would be if you stopped caring for it during the summer.

If you don’t keep an eye on your investments during the summer, you could be left with a greater mess than an overgrown lawn. After all, Wall Street doesn’t take a vacation just because the weather turns nice.

The Library offers tools which simplifies investment tracking by providing you access to financial databases at no cost to you.

Morningstar Investment Research Center is a favorite database of savvy investors. Morningstar Investment Research Center allows you to research more than 35,000 stocks, mutual funds, and exchange-traded funds, build and test a portfolio of investments, and learn new investing skills through self-paced courses and online workshops.

Plus, you’ll have access to the very same analyst reports that top investing firms use to make decisions for their clients.

Gain access to Morningstar Investment Research Center all summer long. Drop by your local library or login online at the Virtual Library to stay on top of your portfolio.

Investing 101

If you missed the past webinar Investing 101, the  recording is now available on Morningstar Investment Research Center under the Portfolio Tab/Investment Goals. The video is a replay of the webinar presented during Money Smart Week, Investing 101: Simple Strategies to Get Started in the World of Investing. The session covers the basics of how to start investing, including why you should invest, determining your investment goals, and finding the right mix of stocks, bonds, and other investments for you using Morningstar research.  The running time is about one hour. (Note: if may take a few minutes to download depending upon your Internet connection.

Another addition to the database is the most recent Market Outlook (Markets tab). You will find the document under Q1 2011 of the Quarterly Industry Reports section. The piece looks at what happened during the past quarter and includes analyst insights for industries and sectors in the second quarter of this year which include:

  • S igns of inflation are unmistakable–and we don’t think this is good news for the stock or bond market.
  •  M any companies will struggle to pass along higher input prices, which means lower margins and/or substitution of alternative inputs.
  • W e think “moaty” firms will weather any inflation better than companies without a competitive advantage.

Finding Target-Date Retirement Funds

Target-date funds have been in the news quite a bit lately. These funds are designed to become more conservative as their “target dates” mature, and have been positioned as good investments for those who know at what point they’ll need to tap these assets–such as retirement or for college. They are even the default options in many 401(k) plans.

Here’s how you can research these funds on Morningstar Investment Research Center:

If you go to the Markets tab, you will not only find industry and sector breakdowns, but also fund category breakdowns. To do this from the Markets page, choose “Fund Category Returns” under the Styles heading. You can also gain access to “Fund Categories” straight from the home page in the Markets section. Once there, you will find a list of target-date funds under the Balanced Funds category. Click on the category that fits your retirement date to see a list of those funds.

The other way to find these funds is using the Fund Screener. As I noted above, target-date funds are actually in the Balanced Funds category. So from the drop-down menu on the screening page, you will want to select “Fund Category” and set the condition to Balanced. After making that selection, you will see another menu on the screen which will have a list of all types of balanced funds, which includes target-date funds. Pick the range you are looking for, and you will see the number of funds that pass your screen. Click the button on the right to view results.

On the results page you will find Morningstar Ratings, returns, total assets, and more. Use the “View” drop-down menu to view performance, risk and tax information, and portfolio metrics. For more information on a particular fund, simply click on the name to get the fund’s data and analyst reports.


Finding Undervalued Stocks

The Training Corner | by Lars Wasvick, Associate Product Manager

The Stock Screener on Morningstar Investment Research Center is a very powerful tool. You can be incredibly specific with your criteria, from operating income growth to asset turnover and everything in between. However, with one simple screen, you can find a list of undervalued stocks in just a few clicks.

You can screen for undervalued stocks using our price/fair value measurement. Let’s step back and define our terms: Fair value is an estimate of what a particular stock is worth. At Morningstar, our stock analysts determine the prices they think stocks on their coverage lists should be trading at based on the intrinsic value of the company and its projected future cash flows.

Where an analyst thinks a stock should be trading and the actual price at which a company trades, however, can be miles apart. To measure this difference between where a stock is trading and its fair value, we have the price/fair value calculation. Basically, it is the price divided by the fair value estimate.

Since equal prices would give us an answer of 1, we know that anything with a price/fair value below 1 is undervalued, and anything above 1 is overvalued. To screen for this, select Price/Fair Value from the dropdown menu. Set the condition to less than, and enter 1 as the value.

On the results page you will see all the stocks that our analysts think are undervalued. To see the ratios, change the view from Snapshot to Morningstar Ratings at the top of the screen. Now you have a list to sort to see the most and least undervalued stocks. From there I suggest visiting the stocks’ data pages and reading the analyst’s report to get his or her full opinion.

For more helpful tips on the new features to Morningstar Investment Research Center, or for an overview on the database, please join us for training April 7 at 11 a.m. Central time. Visit the Client Site to attend, or e-mail for further details.