Fund Research & Insights

How China is Dominating Emerging Market Funds

Market News - October 19, 2016

At its May 2016 index review, MSCI completed the addition of a number of US-listed Chinese companies into its MSCI Global Investable Market Indexes. As a result, China’s weighting has increased in a number of key indexes, and its role in global portfolios has also been amplified. In addition, we believe the indexes now better represent the underlying growth drivers of the Chinese economy, which has various implications for portfolio managers and investors...

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Are You Paying Too Much In Fund Charges?

Market News - October 13, 2016

Fund fees can be a significant predictor of future returns, suggests Morningstar research. The fund management industry is under increasing pressure over fees and, in many cases, costs have fallen. However, an anomaly from recent regulatory changes has left many investors who bought direct from a fund manager paying a higher price for their funds than those buying through an intermediary. The Retail Distribution Review (RDR) changed the way people bought investments: previously investors paid...

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UK Equity Income Funds Remain Popular Amid Brexit Fallout

Market News - October 11, 2016

A Brexit vote will have a positive impact on the global economy over the long term, according to Christopher Lees, senior fund manager at JO Hambro Global Select fund. Speaking at the JO Hambro UK annual investor conference in London last week, Lees said that the fact of a Brexit vote forced questions to be answered, that had been previously been swept under the carpet. Lees said he has faith in Britain’s ability to...

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How Fund Fees are the Best Predictor of Returns

Market News - October 4, 2016

If you’ve been following Morningstar’s research for long, you know how important we think the cost of investing is. The expense ratio is the most proven predictor of future fund returns – and our data agrees. That’s also what academics, fund companies, and, of course, Jack Bogle, find when they run the data. But it’s been a couple of years since I provided the proof, so we have updated my data to...

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Back to Basics: Investing in Emerging Market Debt

Market News - September 29, 2016

Even if an investor decides on emerging market exposure, they then have the task of what type of working out what kind of exposure is best. Passive versus active funds, local currency versus hard currency, equity versus debt. They are all vastly different and require an investor to think about the risk of a currency shock as well as the level of return you would want for that level of risk. This is best thought...

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Fund Fees Cut, Property Funds Open and a Bond Bubble Grows

Market News - September 29, 2016

There was distinct ‘back to school’ flavour about investment news this month. Politicians may be no nearer deciding what a Brexit Britain will look like, but this has not dampened financial markets or the economy. There was more positive economic data released this month revealing there have been no signs of a major slowdown in UK manufacturing or services since the EU Referendum vote. Stock markets – which were volatile in September – have steadied, with modest...

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Which Funds are the Professionals Selling?

Market News - September 8, 2016

Market timing can be the difference between investment success and loss-making disaster. It is not enough to own a ten-bagger investment; you have to know when to sell-up and crystallise those gains too. For many investors, market timing is best outsourced to the professionals – along with asset allocation. Fund-of-funds, or multi-manager funds, give investors access to hundreds of stocks and bonds, with only one single purchase. You can leave...

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5 Mixed-Asset Funds Delivering Top Returns

Market News - September 6, 2016

Nervous investors are abandoning risky funds in favour of more cautiously managed ones as worries about economic headwinds and potential market volatility mount. Since the start of the year, the economic slowdown in China and the divergence in central banks’ monetary policy have raised concerns about global growth – topped by the UK’s surprise vote to leave the European Union on June 24. As a result, multi-asset funds investors are investing in more conservative...

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4 Underperforming Top Rated Funds

Market News - September 2, 2016

Making money in volatile markets is no mean feat – even the best fund managers struggle against macro headwinds and hot money flows. But how can investors discern between funds which are down and out, and those suffering a temporary blip? Morningstar analysts are on hand to help. Morningstar fund analysts base their ratings on five forward-looking qualitative factors; price, performance, investment process, fund manager and parent company. A Gold, Silver or Bronze analyst rating...

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Investors Dump Europe, UK and Property Funds Post-Brexit

Market News - August 30, 2016

UK investors pulled £1.7 billion of European equity funds in July alone according to Morningstar data, as concerns about the contagion of Brexit spread to the European economy. Data from Morningstar Direct revealed European equity funds have recorded £4.7 billion outflows since the start of the year. Investors also sold £1.3 billion of UK equity funds, the largest outflows for the sector since 2009. In third and fourth place for outflows, UK...

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