Morningstar’s Director of Mutual Fund Research Russel Kinnel has released his annual screen for fantastic funds, whittling down the universe of 8,000 funds to just 43. This year’s list is dominated by American Funds and Vanguard and includes some interesting newcomers. American Funds New Perspective is one Gold-rated fund on the list and invests in firms that benefit from changing global trade patterns. “In someone else's hands, that might sound like a gimmicky fund marketing strategy, but American makes it work with strong stock research,” he writes. Kinnel screens funds by looking at things like the cheapest quintile of the category, manager investment of more than $1 million, and returns above the fund’s benchmark over the manager’s tenure.
While international investing can provide access to a broad market, potential for long-term gains and a reduction in portfolio volatility, the average advisor allocates just 22 percent to international equity, according to a new study by Janus Henderson. The MSCI World Index is composed of 40 percent. That said, given the recent outperformance of U.S. markets and valuations overseas, many advisors are starting to revisit their international exposure, the asset manager said. In fact, flows into Morningstar’s international equity category have been more than triple that of U.S. equities over the last three years. “While international investments can present a unique set of risks investors should consider carefully, adding foreign exposure can enhance portfolio diversification, potentially lowering risk over long-term horizons while allowing investors to take advantage of growth potential outside the U.S.,” the report says.
A client who is about to have a child has a million things on his or her mind, and proper document management may not be among them. Here, a handy checklist from the Washington Post of the 14 documents and accounts every new parent needs, including beneficiary change forms, 529 accounts, guardianship documents, trusts and childcare reimbursement accounts. It may not be as dazzling as multicolored pie charts of core-satellite allocations, or discussing alternative fund draw-downs and Sharpe ratios, but arguably it's a more effective way to ensure your client's long-term financial outcomes.