The Markets February 14, 2007

Morningstar’s New Managed Portfolios Based on Indexes

Morningstar Investment Services (MIS) launched a managed account service consisting of individually customized stock portfolios based on its own indexes and independent equity research.
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According to a press release, Morningstar Managed Portfolios Select Stock Baskets are only available to registered investment advisory firms, who then work with clients to analyze their financial situation, create a risk tolerance profile, select a suitable investment strategy, monitor the portfolio performance relative to its financial goals, and review changes to the client’s financial circumstances.

The Morningstar Indexes form the basis of the stock basket’s investment composition. The basket is tailored to investor’s parameters, which include sector and industry exposure, stock restrictions, existing holdings, and personal tax situation.

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MIS then selects stocks for the portfolio using Morningstar, Inc.’s data and research on the stocks within the index, giving more weight to higher-rated stocks and less weight to stocks with low Morningstar Ratings.

The Markets February 14, 2007

Global Equity Picture Is Mixed in January

Emerging markets dropped by 0.11% over the month of January, while developed markets gained 1.20%, but developed market returns trailed emerging markets for both the three- and 12-month periods, according to new Standard&Poor’s data.
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The S&P data indicated that in January, 21 of the 27 developed markets posted an average gain of 3.27%, with substantial declines in Ireland (-4.09%) and South Korea (-5.96%). The emerging markets had mixed results, with 15 of the 26 gaining (7.49%) and 11 losing (-6.44%) for the month, according to a Standard & Poor’s news release about its global stock market review.

Posting impressive returns were Nigeria (20.07%) and Pakistan (14.42%). In January, Jordan had a 13.81% recovery, returning the market to positive territory for the three-month period with a 1.62% gain. For the month, Venezuela’s loss was significant, wiping out prior impressive gains, as investors sold the index down 33.95% because of economic and political concerns, the S&P data indicated.

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For the month, eight of the 10 economic sectors showed gains, with Industrials as the best-performing sector at 2.72%. Energy remained the worst performer with a 2.59% decline due to concern over oil prices and production.

Performance remained mixed for the sectors in January, with strong gains posted for Internet Software and Services (7.06%), Marine Transportations (6.15%) and Building Products (5.80%), while there were significant givebacks in Semiconductors & Semiconductor Equipment issues (-1.73%) as well as Oil, Gas and Consumable Fuels (-2.69%).

More information on the January report is here.

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