• Passive Fund Providers Take an Active Approach to Investment Stewardship

    Nelly Poon    Hortense Bioy, CFA, Alex Bryan, CFA, Jackie Choy, CFA, Jose Garcia-Zarate, Ben Johnson, CFA
    11 Dec 2017

    As assets continue to flow from actively managed to index-tracking strategies, the largest index asset managers are becoming increasingly influential, often ranking among the largest investors of public companies. Despite this fact, little research has been done to understand how index managers carry out their investment stewardship responsibilities. In this paper, we share our findings and highlight what managers have in common and areas where they differ. We also provide a list of best practices that investors can use to assess how asset managers stack up.
  • Morningstar Global Fund Investor Experience Study 2017

    11 Oct 2017

    First published in 2009, the Morningstar Global Fund Investor Experience study has promoted a
    dialogue about global best practices for mutual funds from the perspective of fund investors. This
    biennial report measures the experiences of mutual fund investors in 25 countries across North
    America, Europe, Asia, and Africa. Morningstar researchers evaluated countries in four categories—
    Regulation and Taxation, Disclosure, Fees and Expenses, and Sales. The grading scale was changed
    in the 2017 study to better express where a country sits relative to global peers.
  • A Global Guide to Strategic-Beta Exchange-Traded Products

    Nelly Poon    Jackie Choy, CFA, Anshula Venkataraman, Dimitar Boyadzhiev, Alex Bryan, CFA, Ben Johnson, CFA
    12 Sep 2017

    Three years ago, we introduced our naming convention and taxonomy for the fast-growing universe of strategic-beta exchange-traded products, or ETPs. In this year’s guide, we provide an update on the state of the global strategic-beta ETP landscape.
  • Mind the Gap - Asia 2017

    18 Jun 2017

    This paper seeks to explore whether investors within the open fund markets in Asia, namely Hong Kong, Singapore, and Taiwan, suffer from returns gaps. We decided to focus on these markets not only because of their representations within the region, but because of the way mutual funds are often sold by commission-based distributors, which at times encourages frequent switching. Moreover, investors pay no capital gains tax. The end result is that mutual fund investors in Hong Kong, Singapore and Taiwan tend to have shorter investment horizons. However, practice doesn’t make perfect with our study confirming that Asian investors face similar challenges in timing their investments, and that the gaps in returns were largest in more volatile, concentrated equity strategies.
  • Safe Withdrawal Rates for Japanese Retirees Today

    Nelly Poon    David Blanchett PhD, CFA, CFP, Katsunari Yamaguchi, PhD, CFA, CMA
    17 May 2017

    Japan faces many retirement challenges. People are living longer, interest rates are at zero, and most personal financial assets are parked in low-return bank deposits. Each of these characteristics lowers the portion of savings a retiree can withdraw each year while safely expecting savings to reach the end of retirement. This portion is commonly known as the “safe withdrawal rate.”
    In this paper, we use historical returns to explore safe withdrawal rates, both in Japan and internationally. More importantly, we estimate safe withdrawal rates for Japanese investors based on our current return and risk expectations for Japan.
  • Will Investors in China A-Share ETFs Benefit From the Migration Towards Physical Replication?

    23 Apr 2017

    Many ETFs offering exposure to onshore Chinese equities have begun to shift from synthetic replication to physical replication. Will this shift yield better results for investors? Is physical or synthetic replication a better approach to investing in the China A-share market? 
  • The Morningstar Sustainability Atlas

    23 Apr 2017

    This report examines the sustainability profiles of Morningstar’s suite of 46 equity market indexes, up from 35 indexes in the initial edition of this report in October 2016. The country indexes, which span developed and emerging markets and represent 97% of global market capitalization, vary significantly across environmental, social, and governance (ESG) criteria. 
  • Safe Withdrawal Rates for Australian Retirees

    Nelly Poon    David Blanchett CFP, CFA, Anthony Serhan, CFA, Peter Gee
    29 Mar 2017

    In this paper we briefly explore safe withdrawal rates from the perspective of historical returns, both international and domestic, but more important provide some context of safe withdrawal rates given our return expectations. There are four primary findings from this research. First, Australians may have unrealistic future return expectations given how well the markets have performed historically. Second, while safe withdrawal rates today are similar to historical averages, they are lower and may be significantly lower when incorporating improvements in mortality and the impact of fees. Third, current minimum withdrawal rates for account based pensions in Australia may lead to investors depleting retirement assets too soon. Finally, a balanced portfolio is likely the best allocation for Australia retirees. Overall, while these findings are less optimistic than past research on the topic of safe withdrawal rates, they are nevertheless an important starting place for retirees and financial advisors today.