Investing Insights

The 60/40 portfolio has proven it’s here to stay, but it can benefit from a refresh like other classics. The total portfolio approach refines the 60/40. It takes a closer look at the components of the plain-vanilla portfolio and considers how risky they are. The goal is to help investors stay disciplined as market conditions change for the better or worse. Jason Kephart has written about the total portfolio approach. He’s a senior principal of multi-asset manager research for Morningstar. How a Total Portfolio Approach Can Improve the 60/40 Portfolio Morningstar’s Tax-Planning and IRA Resources for 2026 On this episode: 00:00:00 Welcome 00:01:20 Total Portfolio Approach vs 60/40 Portfolio 00:01:52 How Growth and Stability Work 00:03:30 Why High-Yield Bonds Wouldn’t Go into Stability 00:04:30 Stocks That Might Be Better Suited for Stability than Growth 00:06:52 Challenges of the Total Portfolio Approach 00:08:49 How Investors Can Use This Strategy Watch more from Morningstar: Why REIT ETFs Still Work as Real Estate Slumps How to Make the Most of Your IRA in 2026 3 Winners and 3 Losers from Emerging-Market Funds’ Big Rally Follow Morningstar on social: Facebook https://www.facebook.com/MorningstarInc/ X https://x.com/MorningstarInc Instagram https://www.instagram.com/morningstarinc/?hl=en LinkedIn https://www.linkedin.com/company/morningstar/posts/?feedView=all Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The struggle of brick-and-mortar real estate has extended into investment portfolios. Elevated inflation and high interest rates have weighed on the real estate sector over the past few years. Real estate investment trusts or REIT ETFs have not been spared. Yet these exchange-traded funds are popular among income investors. They generate cash and can help diversify a portfolio. So, where do they fit in yours? And which REIT ETFs do Morningstar analysts consider top picks? Dan Sotiroff is the associate director of US Passive Strategies for Morningstar. Dan is also the editor of Morningstar’s ETFInvestor newsletter. Subscribe to Morningstar’s ETFInvestor newsletter. https://newsletters.morningstar.com/ On this episode: 00:00:00 Welcome 00:01:26 Basics of REIT ETFs 00:04:34 Active vs. Passive REIT ETFs 00:06:03 REIT ETFs’ Performance vs US Stock Market 00:09:20 Cutting the Tax Bill on REIT ETF income 00:10:06 Top REIT ETFs From Vanguard & Schwab 00:13:48 Key Takeaways for Income Investors Watch more from Morningstar: How to Make the Most of Your IRA in 2026 3 Winners and 3 Losers from Emerging-Market Funds’ Big Rally How New Retirees Can Spend More Without Risking Their Savings Follow Morningstar on social: Facebook https://www.facebook.com/MorningstarInc/ X https://x.com/MorningstarInc Instagram https://www.instagram.com/morningstarinc/?hl=en LinkedIn https://www.linkedin.com/company/morningstar/posts/?feedView=all Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Emerging-market funds will have a tough act to follow in 2026. The category racked up big gains last year following small returns for years. And a mix of factors like trade tensions prompted many investors to shift their dollars outside the US. Should you add emerging-market funds to your portfolio? And which ones were winners or losers? Morningstar’s senior principal of ratings Russ Kinnel dug into the data. The editor of the FundInvestor newsletter is here to tell you want he found. How to Get the Most Out of Your IRA Contributions On this episode: 00:00:00 Welcome 00:01:16 2026 IRA Contribution Limits 00:01:45 How to Decide Between a Traditional and Roth IRA 00:03:52 Stock Investing Mistakes to Avoid With Your IRA 00:05:20 How to Invest Your IRA When You're Early in Your Career 00:08:13 How to Assess Your IRA in the Middle of Your Earning Years 00:10:23 The Advantages of Non-US Stocks and How to Diversify Your IRA 00:14:30 How to Derisk Your Portfolio as You Approach Retirement 00:16:47 Rebalancing Your IRA Without Tax Consequences 00:17:48 Is it ever too late to Contribute to Your IRA? Watch more from Morningstar: 3 Winners and 3 Losers from Emerging-Market Funds’ Big Rally How New Retirees Can Spend More Without Risking Their Savings Beyond AI: Are Quantum Stocks the Next Big Thing in Tech Investing? Follow Morningstar on social: Facebook https://www.facebook.com/MorningstarInc/ X https://x.com/MorningstarInc Instagram https://www.instagram.com/morningstarinc/?hl=en LinkedIn https://www.linkedin.com/company/morningstar/posts/?feedView=all Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

merging-market funds will have a tough act to follow in 2026. The category racked up big gains last year following small returns for years. And a mix of factors like trade tensions prompted many investors to shift their dollars outside the US. Should you add emerging-market funds to your portfolio? And which ones were winners or losers? Morningstar’s senior principal of ratings Russ Kinnel dug into the data. The editor of the FundInvestor newsletter is here to tell you want he found. Subscribe to Morningstar’s FundInvestor newsletter. On this episode: 00:00:00 Welcome 00:01:20 Why Emerging‑Market Funds Surged After Years of Sluggish Returns 00:02:29 Market Shifts of Leadership in Asia 00:03:36 2025’s Winning Emerging-Market Funds 00:05:08 2025’s Losing Emerging-Market Funds 00:09:34 What’s Next for Emerging‑Market Funds in 2026? 00:10:21 How Fidelity Contrafund’s Will Danoff Built a Successful Stock-Picking Record 00:13:38 What Everyday Investors Can Learn from Danoff Watch more from Morningstar: How New Retirees Can Spend More Without Risking Their Savings Beyond AI: Are Quantum Stocks the Next Big Thing in Tech Investing? How to Generate Steady Income in 2026 Follow Morningstar on social: Facebook https://www.facebook.com/MorningstarInc/ X https://x.com/MorningstarInc Instagram https://www.instagram.com/morningstarinc/?hl=en LinkedIn https://www.linkedin.com/company/morningstar/posts/?feedView=all Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

If you’re newly retired or will join the ranks soon, it’s time to think about how you plan to spend your nest egg. Morningstar researchers are helping new retirees figure out where to begin. The recently published State of Retirement Income report concluded that the starting safe withdrawal rate for people beginning their retirement in 2026 is 3.9%. That number might appear low. However, the team has analyzed several strategies to lift it to almost 6%. Morningstar portfolio strategist Amy Arnott has investigated the data and joined the podcast to explain flexible withdrawal strategies. How Much Can You Spend in Retirement? Here’s Your Starting Safe Withdrawal Rate for 2026 https://apple.news/ALEEtAf1FTAm7WUFGvYvXVQ On this episode: 00:00:00 Welcome 00:01:26 Understanding the 3.9% Safe Withdrawal Rate 00:02:33 How Flexible Strategies Lift Withdrawal Rates Up to 5.7% 00:03:48 Flexible Approaches for Retirees Seeking Predictable Paycheck-like Income 00:05:40 Inside the Vanguard Dynamic Spending Method 00:07:15 Highest Lifetime Spending & Highest Starting Safe Withdrawal Rate 00:09:20 Leaving a Legacy and Strengthening Your Portfolio 00:14:30 4 Financial To-Dos to Kick Off the New Year Watch more from Morningstar: Beyond AI: Are Quantum Stocks the Next Big Thing in Tech Investing? How to Generate Steady Income in 2026 All in on Magnificent 7? Where You Should Invest Next Follow Morningstar on social: Facebook https://www.facebook.com/MorningstarInc/ X https://x.com/MorningstarInc Instagram https://www.instagram.com/morningstarinc/?hl=en LinkedIn https://www.linkedin.com/company/morningstar/posts/?feedView=all Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Quantum computing stocks have surged in popularity over the past year, capturing investors’ enthusiasm on the coattails of the artificial intelligence boom. These buzzy names took off last summer after a slew of announcements and research breakthroughs from the biggest players in the tech industry like Alphabet GOOGL/GOOG, Amazon AMZN and Microsoft MSFT. Quantum computing promises to be one of the most transformative technological developments of the next few decades, but Morningstar’s analysts caution that mainstream market adoption could be a long away. Dan Romanoff, a senior equity research analyst on the technology team at Morningstar, discusses new developments in the quantum computing landscape and the best way for investors to get exposure in their portfolios now. Quantum Computing Market Insights On this episode: 00:00:00 Welcome 00:01:28 What Is Quantum Computing? 00:04:44 Why Are Computing Stocks Attracting Investors? 00:12:50 Quantum Technology Isn’t Yet Ready for the Mainstream 00:18:19 Quantum Could Represent a $200 Billion Market 00:22:48 Winners and Losers in Quantum Computing Stocks 00:25:31 HowTo Invest in Quantum Computing Now Watch more from Morningstar: How to Generate Steady Income in 2026 All in on Magnificent 7? Where You Should Invest Next 9 Top ETFs for Income Investors That Stood Out in 2025 Follow Morningstar on social: Facebook https://www.facebook.com/MorningstarInc/ X https://x.com/MorningstarInc Instagram https://www.instagram.com/morningstarinc/?hl=en LinkedIn https://www.linkedin.com/company/morningstar/posts/?feedView=all Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Higher interest rates have ushered in an era where income opportunities abound. That’s following years of parched cash flow streams and low rates, especially in fixed income. However, risks like stubborn inflation and elevated stock valuations exist. Morningstar researchers believe it’s important to identify income opportunities that could be resilient in today’s market. Dominic Pappalardo, chief multi-asset strategist for Morningstar Wealth, joined Investing Insights to discuss where to look. Editor's note: The host misspoke when referring to Morningstar Holland’s chief European market strategist. His name is Michael Field. Income Investing Strategies for 2026: Maximizing Yield in an Uncertain Market On this episode: 00:00:00 Welcome 00:01:33 Income investing in 2026 00:04:02 Bond market breakdown: short, intermediate, or long term? 00:07:39 Global bonds and hedging strategies 00:13:27 Equity Opportunities Beyond the US 00:15:31 REITs vs Utilities 00:17:14 Building Resilient Income Streams Watch more from Morningstar: All in on Magnificent 7? Where You Should Invest Next 9 Top ETFs for Income Investors That Stood Out in 2025 Where to Invest in 2026 After This Year’s Market Volatility Follow Morningstar on social: Facebook https://www.facebook.com/MorningstarInc/ X https://x.com/MorningstarInc Instagram https://www.instagram.com/morningstarinc/?hl=en LinkedIn https://www.linkedin.com/company/morningstar/posts/?feedView=all Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Is your portfolio making a big bet on the Magnificent Seven? Mega-cap names like Nvidia, Alphabet, and Apple belong to the exclusive club that has largely driven US returns higher in recent years. Their success has led to market concentration. Portfolios tracking broad benchmarks have seen their diversification decrease and risk increase. How can you prepare your portfolio to absorb potential shocks? And where are the opportunities beyond the Mag Seven? Morningstar Holland’s Chief European Market Strategist Michael Field is one of the researchers who investigated this. Beyond the Magnificent Seven: Unlocking Value in a Concentrated Stock Market On this episode: 00:00:00 Welcome 00:01:19 The Magnificent Seven’s strong returns have benefited many investors. Why is their dominance a risk? 00:01:36 Your team highlighted a noteworthy stat in the report. The top 10 US stocks make up about 35% of the overall market. That’s almost double from a decade ago. What does that signal to you? 00:02:09 Can you explain what the hidden cost of market concentration is? 00:02:37 If the top stocks hold so much of the gains, where does that leave the rest of the market? 00:03:11 Let’s focus on key periods of market concentration. How does the current environment compare to the dot-com bubble? 00:03:41 And what about now versus the global financial crisis? 00:04:10 What if investors pulled back due to market concentration concerns in the last decade? Why would that have backfired? 00:04:45 How can investors manage the risk of market concentration in their portfolios? 00:05:20 Morningstar has identified investment opportunities for 2026. Why does the team favor US small caps over US large caps? 00:05:53 Another opportunity is the healthcare sector. What companies do Morningstar analysts think could fend off the competition for 10 years or more? 00:06:30 Morningstar encourages international diversification. Can you talk about the regions outside the US that look attractive for stock investors? 00:06:58 What’s the takeaway for diversifying beyond the Magnificent Seven in 2026? Watch more from Morningstar: 9 Top ETFs for Income Investors That Stood Out in 2025 LINK Where to Invest in 2026 After This Year’s Market Volatility LINK Why Betting Against Nvidia in the AI Arms Race Could Be a Mistake Follow Morningstar on social: Facebook https://www.facebook.com/MorningstarInc/ X https://x.com/MorningstarInc Instagram https://www.instagram.com/morningstarinc/?hl=en LinkedIn https://www.linkedin.com/company/morningstar/posts/?feedView=all Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

This week, we’re looking back at three discussions we held earlier this year on Investing Insights about exchange-traded funds that income investors might find attractive. Morningstar ETF specialists, Bryan Armour and Dan Sotiroff, talked about dividend, bond, and covered-call ETFs in 2025. Subscribe to Morningstar’s ETFInvestor Newsletter. On this episode: 00:00:00 Welcome 00:01:33 Dividend investing can result in exposure to factors like value, quality, and low volatility. Can you briefly explain one, what is factor investing, and then where do dividend ETFs typically land? 00:03:21 How do you find a dividend ETF that provides the optimal, or just rightamount, of factor exposure? And what should appear on our checklist? 00:04:40 Four dividend ETFs hold Morningstar’s Medalist Rating of Gold. Let’s start with the two dividend growth ETFs from Vanguard that hold these marks. 00:05:17 Explain why Vanguard’s top dividend income strategy also impressed Morningstar analysts. 00:06:07 The final and fourth Gold-rated dividend ETF mixes both income and growth strategies. Talk about the one from Schwab.Bond ETFs are having a banner year. Why are investors turning to these investments? 00:09:01 What makes a core bond ETF a solid portfolio building block? 00:10:02What’s the top idea that’s received high marks from Morningstar? 00:11:39We’re shifting from the least risky to the next level up, core-plus. What do these bond ETFs typically offer that an index-tracking ETF does not? 00:11:21 Can you tell us one intermediate core-plus bond ETF that’s earned a Gold rating from Morningstar? 00:11:56 Multisector bond ETFs take on a bit more risk than the previous two categories, and that comes with an expectation of more income. Should income investors skip the others and start here? 00:13:11It’stime for the third top idea. What multisector bond ETF should folks consider? 00:13:36 High-yield bond ETFs are the riskiest among the categories we’re discussing today. What additional risks are investors taking on for the juicy yields? 00:14:42 Morningstar does not currently rate any actively managed high-yield bond ETFs. Is there one that income investors should watch? 00:16:41What’s making covered-call ETFs so popular in 2025? 00:17:09 Their yields lookvery high. What is driving them? 00:18:31 What types of trade-offs are investors making? 00:19:51 Which covered-call ETFs do Morningstar analysts consider a solid choice for investors, and why? Watch more from Morningstar: Where to Invest in 2026 After This Year’s Market Volatility LINK Why Betting Against Nvidia in the AI Arms Race Could Be a Mistake Here’s What Your Retirement Spending Rate Should Be in 2026 Follow Morningstar on social: Facebook https://www.facebook.com/MorningstarInc/ X https://x.com/MorningstarInc Instagram https://www.instagram.com/morningstarinc/?hl=en LinkedIn https://www.linkedin.com/company/morningstar/posts/?feedView=all Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Market volatility has left its imprint in 2025. Turbulence from tariffs, tech, and more have shaken investors’ confidence at times. Many folks looked for safety during those down periods. Yet, the US stock market overall has delivered a strong performance. So, who are the leaders and laggards as this year comes closer to wrapping up? And what should you watch with 2026 fast-approaching? Morningstar Indexes strategist and columnist Dan Lefkovitz has examined this year’s investment performance. 5 Investing Surprises From 2025 On this episode: 00:00:00 Welcome 00:02:10 Market volatility ebbed and flowed in 2025. How volatile was the US stock market this year compared to recent years? 00:03:10 What has driven the volatility this year? 00:04:42 During these down periods, where did investors hide or seek safety? 00:05:39 Let’s zoom in on the investment leaders and laggards this year. What areas are outperforming, and which ones are underperforming? 00:06:43 You research the performance of investment factors which can drive risk and return. What has been the leading factor this year, and why? 00:07:21 Leadership changed throughout the year. What caused those changes? 00:08:26 Q4 will end in a few weeks. What areas should investors watch as we head into 2026? 00:10:12 We’ve discussed market volatility in 2025. What takeaways can we bring with us into the new year? Watch more from Morningstar: Why Betting Against Nvidia in the AI Arms Race Could Be a Mistake Here’s What Your Retirement Spending Rate Should Be in 2026 How ETFs Help You Cut Your Tax Bill Follow Morningstar on social: Facebook https://www.facebook.com/MorningstarInc/ X https://x.com/MorningstarInc Instagram https://www.instagram.com/morningstarinc/?hl=en LinkedIn https://www.linkedin.com/company/morningstar/posts/?feedView=all Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

A shift in mindset can help investors cope with market uncertainty. 2025 was a case study in the futility of trying to predict the market. Wall Street had lofty expectations for stocks entering the year. Then the tariff shock in April rattled the markets and many firms lowered their annual stock forecasts in response. They later raised them—after stock prices rebounded. With the new year on the horizon, Morningstar’s 2026 Global Outlook report is offering investors tactics to weather whatever the future may hold. Morningstar strategists and an analyst will discuss key challenges facing investors in 2026 in our series. Dan Kemp, the chief research and investment officer with Morningstar Investment Management Europe, is one of the major driving forces behind the report. We’re going to dig into research analyzing the AI arms race and its worldwide buildout. A team of Morningstar researchers have investigated the spending and the risks. Morningstar Research Services’ senior equity analyst Brian Colello was part of the effort. Brian also covers Nvidia. He discusses the AI king’s outlook, competition, and stock. AI Arms Race: How Tech’s Capital Surge Will Reshape the Investment Landscape in 2026 On this episode: 00:36:00 Welcome 00:01:48 We typically talk about your Markets Brief column, but today we’re focusing on “Morningstar’s 2026 Global Investment Outlook.” The theme is “preparing for what comes next.” What will investors looking for ways to cope with uncertainty find in this in-depth report? 00:02:35 What makes Morningstar’s outlook different from other companies? 00:03:21You’ve written about how a few ideas from the global investment report resonated with you. What are they, and why? 00:05:01 As we wrap up our conversation, what’s a lesson from 2025 that you want investors to take into 2026? 00:07:13 Big Tech companies are spending hundreds of billions of dollars on the global construction boom. Where’sthe money going, and how does this spending compare to other sectors like energy? 00:08:20 This massive buildout comes with execution and cost risks. What’s at stake if hyperscalers underestimate these challenges? 00:09:54 How is AI affecting sector valuations? How does it compare to the tech bubble in the late 1990s? 00:12:18 Morningstar believes many investors are already heavily exposed to AI due to Big Tech’s size in broad stock indexes. How can folks counteract that? 00:14:31Let’s pivot to the AI industry leader, Nvidia. The chipmaker’s stock took a big hit when DeepSeek arrived in January. Nvidia became the world’s first $5 trillion company in October. What are your thoughts about the year Nvidia is having? 00:17:20 Rival chipmaker Moore Threads recently made its market debut in China. What would it mean for Nvidia if China comes out with more advanced chips? 00:20:12 Interest is growing in Alphabet’s AI chips. Can Nvidia fend off competition from one of its customers? 00:23:30 What is your outlook for Nvidia and other chipmaker stocks? And which do you think is undervalued? 00:26:18What’s the takeaway for investors regarding Nvidia and the AI arms race? Watch more from Morningstar: Here’s What Your Retirement Spending Rate Should Be in 2026 How ETFs Help You Cut Your Tax Bill Tax-Loss Harvesting Isn’t Just for Downturns. Here’s Why Follow Morningstar on social: Facebook https://www.facebook.com/MorningstarInc/ X https://x.com/MorningstarInc Instagram https://www.instagram.com/morningstarinc/?hl=en LinkedIn https://www.linkedin.com/company/morningstar/posts/?feedView=all Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Most retirees want to spend as much as they can without having to worry about running out of money. Morningstar’s State of Retirement Income research analyzes retirement spending strategies to determine the highest safe starting withdrawal rate for new retirees in 2026. Christine Benz, Morningstar’s director of personal finance and retirement planning and co-host of The Long View podcast, breaks down the research and shares some ideas about how you can boost your retirement spending. What’s a Safe Retirement Withdrawal Rate for 2026? On this episode: 00:00:00 Welcome 00:00:46 Each year, you and your colleagues producethis really comprehensive research about retirement income. And as part of that research, you try toidentify what a safe withdrawal rate will be for the year ahead. 00:01:59 What is that safe withdrawal percentage, and how did you arrive at that conclusion? 00:02:41 The 4% rule often comes up in the conversation around retirement spending. How does that compare to your base case? 00:03:30 I know there are some misperceptions about your retirement income research and what that safe withdrawal percentage means. What are they? 00:03:28 So, how should retirees use this research? 00:04:51 The safe starting withdrawal rate that you found in your base case might feel a little low for some retirees. Are there other strategies that retirees can use to boost their spending? 00:07:02 So, flexible strategies are best suited for retirees that are focused on maximizing their spending. 00:08:52 What kind of retiree would benefit from a more rigid strategy, like the fixed inflation-adjusted spending approach that you use in your base case? 00:09:26 How does asset allocation come into play? Would a stock-heavy portfolio support a higher withdrawal rate in retirement? 00:10:36 So far, we’ve focused on portfolio income strategies, but you also looked at nonportfolio income sources like annuities and Social Security. What did you find? 00:13:34 It seems like there’s some more nuance to the suggestion of delaying Social Security. Can you talk about that? 00:14:50 How about annuities? Can you discuss some of the key considerations that income-centric retirees should bear in mind? 00:16:07 Studies have found that retirees don’t actually spend the same amount over the course of their retirement. What does actual retirement spending tend to look like, and how might that affect a retiree’s plans? 00:17:59Let’s talk about some scenarios that can throw off a retiree’s plan. One might be a market downturn early in retirement. What kind of impact could that have on spending? 00:18:56 Another scenario might be retiring earlier than expected. What kind of implications would that have for safe withdrawals? 00:20:26 What is one final takeaway from the research that you want retirees to come away with? Watch more from Morningstar: How ETFs Help You Cut Your Tax Bill Tax-Loss Harvesting Isn’t Just for Downturns. Here’s Why Bond ETFs Are Surging in Popularity in 2025. Here Are 5 of the Best Follow Morningstar on social: Facebook https://www.facebook.com/MorningstarInc/ X https://x.com/MorningstarInc Instagram https://www.instagram.com/morningstarinc/?hl=en LinkedIn https://www.linkedin.com/company/morningstar/posts/?feedView=all Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Exchange-traded funds can help you cut your tax bill. All funds must distribute capital gains from the stocks and bonds that they sell throughout the year. The gains can leave you stuck with unwanted taxes. ETFs and mutual funds differ when it comes to tax efficiency. It starts with how the investments are traded and how the transactions are treated. The differences can result in ETF investors owing less than mutual fund investors or nothing at all because ETFs can minimize their capital gain distributions. Bryan Armour, Morningstar’s director of ETF and passive strategies research for North America, explains how ETFs beat mutual funds at the tax game. ETFs vs. Mutual Funds: The Benefits That Really Matter On this episode: 00:00:00 Welcome 00:01:01 ETFs are more tax-friendly than their mutual fund rivals. Why is that? 00:02:17 How does the way ETFs are traded limit the tax drag that affects mutual funds? 00:03:23 ETF investors will eventually pay a tax bill. Why is it important to control when that happens? 00:04:04We talked about tax drag. What about cash drag? How are ETFs winning here? 00:04:51An ETF’s underlying strategy can sharpen or dull the edge it has over a mutual fund when it comes to capital gains. Which ETF strategies have held the biggest advantage over the past few years? 00:05:40Can you talk about the tax issues involving international stocks when managing gains in an ETF? 00:06:55And what about taxable-bond ETFs versus mutual funds? 00:07:37 Some ETFs do not benefit from tax efficiency. Which investments are those, and why don’t they? 00:08:24High-turnover strategies, where there’s a lot of buying and selling, can result in a big tax bill for investors. What have you found when you compared two momentum strategies? 00:08:58How can outflows leave loyal investors with a big tax bill? 00:09:49Active ETFs’ popularity is soaring. How tax-friendly are these investments versus their passive peers and mutual funds? 00:10:52 Which ETFs belong in taxable accounts and tax-advantaged accounts like an IRA or 401(k) to maximize tax efficiency? 00:11:55What if someone listening or watching just realized they should work on their asset location? What should they do? 00:12:54What’s the takeaway for using ETFs to cut tax bills? Watch more from Morningstar: Tax-Loss Harvesting Isn’t Just for Downturns. Here’s Why Bond ETFs Are Surging in Popularity in 2025. Here Are 5 of the Best Investors Still Need to Mind the Gap in Their Funds’ Returns Follow Morningstar on social: Facebook https://www.facebook.com/MorningstarInc/ X https://x.com/MorningstarInc Instagram https://www.instagram.com/morningstarinc/?hl=en LinkedIn https://www.linkedin.com/company/morningstar/posts/?feedView=all Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Your portfolio might be due for an end-of-the-year cleanup. The Morningstar US Market Index is up about 15% through mid-November 2025, and overall performance has been strong for years (even after 2022’s down market). That said, some stock sectors have performed significantly better than others, and performance can vary widely even within a sector. That could mean you’relikely holding some winners and some losers. Tax-loss harvesting could help trim your tax bill to save some money. While you’re tuning up your portfolio, it could also be a good opportunity to bring your asset allocation back into balance. Morningstar portfolio strategist Amy Arnott is here to explain how to pull off both strategies. How to Rebalance Your Portfolio in a Lofty Market https://www.morningstar.com/portfolios/how-rebalance-your-portfolio-lofty-market On this episode: 00:11 Welcome 01:03 What is tax-loss harvesting, and how does it work? 01:41 Is a brokerage or retirement account better suited for tax-loss selling? Why? 02:12 The US stock market has experienced solid growth so far in 2025. Do up markets make it harder to spot losses? 02:52 Why is tax-loss harvesting still a good strategy even when times are good? 03:32 Where can investors find losses to offset gains in their portfolio this year? Let’s start with stocks. 04:33 And what about mutual funds and ETFs? 05:17 Can you explain what wash-sale rules are, and how to play by the IRS’ rules? 06:39 What are some other strategic ways to take advantage of the losses? 07:55 In the spirit of tuning up our portfolio, this might be a good time to rebalance. How does that work, and why can it be an emotional challenge sometimes? 09:14 The 60/40 portfolio might need rebalancing. What’s happened over the past decade? 09:43 And what about growth versus value and US versus international stocks? 10:44 What are a few tips on how to restore balance to a portfolio? 12: 48 What is the takeaway for taking this time of year to do tax-loss harvesting and rebalancing? Watch more from Morningstar: Bond ETFs Are Surging in Popularity in 2025. Here Are 5 of the Best Investors Still Need to Mind the Gap in Their Funds’ Returns The US Dollar Is Weak. Is Your Portfolio at Risk? Follow Morningstar on social: Facebook https://www.facebook.com/MorningstarInc/ X https://x.com/MorningstarInc Instagram https://www.instagram.com/morningstarinc/?hl=en LinkedIn https://www.linkedin.com/company/morningstar/posts/?feedView=all Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Investors are betting big on bond exchange-traded funds. Hundreds of billions of dollars have poured into bond ETFs in the first nine months of 2025. And more of these strategies have hit the market over the past several years. It’s important to remember that some bond ETFs are riskier than others. What should investors consider before tweaking their portfolio? Dan Sotiroff, a senior manager research analyst at Morningstar Research Services and the editor of the Morningstar ETFInvestor newsletter, discusses that and shares five top ideas for income investors. Subscribe to Morningstar ETFInvestor for the full list of highly-rated bond ETFs. On this episode: 00:54 Bond ETFs are having a banner year. Why are investors turning to these investments? 02:31 Which is getting the bigger slice: passively or actively managed bond ETFs? 03:15 What are the four major types of bond ETFs, and how do they differ? 04:35 This month’s edition of Morningstar ETFInvestor analyzed more than a dozen bond ETFs. What makes a core bond ETF a solid portfolio building block? 05:47 What’s the top idea that’s received high marks from Morningstar? 06:27 We’re shifting from the least risky to the next level up, core-plus. What do these bond ETFs typically offer that an index-tracking ETF does not? 07:11 Can you tell us one intermediate core-plus bond ETF that’s earned a Gold rating from Morningstar? 07:44 Multisector bond ETFs take on a bit more risk than the previous two categories, and that comes with an expectation of more income. Should income investors skip the others and start here? 08:59 It’s time for the third top idea. What multisector bond ETF should folks consider? 09:25 High-yield bond ETFs are the riskiest among the categories we’re discussing today. What additional risks are investors taking on for the juicy yields? 10:30 Morningstar does not currently rate any actively managed high-yield bond ETFs. Is there one that income investors should watch? 11:28 What’s the takeaway for folks figuring out if these types of bond ETFs fit in their portfolios? Watch more from Morningstar: Investors Still Need to Mind the Gap in Their Funds’ Returns The US Dollar Is Weak. Is Your Portfolio at Risk? 2025’s Winners and Losers, from Gold to Small Cap Stocks to the 60/40 Portfolio Follow Morningstar on social: Facebook https://www.facebook.com/MorningstarInc/ X https://x.com/MorningstarInc Instagram https://www.instagram.com/morningstarinc/?hl=en LinkedIn https://www.linkedin.com/company/morningstar/posts/?feedView=all Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Are you getting the most out of your fund’s performance? Over the past 10 years, the average dollar invested in US mutual funds and exchange-traded funds earned 1.2% less per year than what those funds returned during the same period. That’s the top-line finding in this year’s Mind the Gap study, which aims to address the question of where investors succeeded in capturing most of their funds’ returns, and where they fell short. Jeff Ptak, a managing director for Morningstar Research Services, breaks down the takeaways from the report and what investors can do if they want to avoid leaving money on the table. Mind the Gap US 2025 On this episode: How does the report measure the difference between investor returns and total returns? How does the latest research compare with previous years? Is the “gap” going away? This difference in investor returns and total returns doesn’t just come from people failing to time the market. What else might cause the gap? Where have investors been able to capture most of their funds’ total returns, and where have they fallen short? Are there certain categories that stand out? Exchange-traded funds continue to gain popularity and market share. Did the investment type, mutual fund or ETF, make a difference in investor outcomes? Morningstar research has found that active funds have largely struggled to beat their benchmarks, but certain categories are better suited for active management than others. Is there a difference in the investor return gap in active versus passive funds? The study found that the more investors traded, the less they made. Why is that? Morningstar has found that fees tend to be a predictor of performance. Does that finding hold when looking at investor returns? The report also looked at the effects of return volatility. How did that translate to investor outcomes? You’ve written that where a fund is utilized can be just as important as the type of fund and how it’s used. Can you explain that? What is one takeaway from your research? Watch more from Morningstar: The US Dollar Is Weak. Is Your Portfolio at Risk? 2025’s Winners and Losers, from Gold to Small Cap Stocks to the 60/40 Portfolio The Stock Market Is Ultra-Concentrated. Here’s How to Manage the Risks. Follow Morningstar on social: Facebook https://www.facebook.com/MorningstarInc/ X https://x.com/MorningstarInc Instagram https://www.instagram.com/morningstarinc/?hl=en LinkedIn https://www.linkedin.com/company/morningstar/posts/?feedView=all Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

How is the weakening dollar affecting your portfolio? The world’s reserve currency fell sharply in the first half of 2025, making it a bruising year. It has recovered some but still sits below where it started the year. Other currencies like the euro, Japanese yen, and Mexican peso look stronger against the greenback. Several factors could influence whether the dollar roars back or recedes. Why should the dollar’s performance matter for everyday investors like you? Morningstar Indexes strategist Dan Lefkovitz explains why and what you can do to protect your portfolio from currency fluctuations. The bifurcation of the stock market is appearing to divide investors into two camps. There’s a lot of optimism baked into share prices of firms seen as leaders in artificial intelligence, according to Dan Kemp, chief research and investment officer at Morningstar Investment Management Europe. The Market Brief author points to Tesla TSLA as a great example, since investors are ascribing significant value to the company’s unproven, future products. Meanwhile, there’s a lot of pessimism in parts of the market that are not involved in AI. Kemp reminds investors to look for undervalued opportunities in the unloved areas of the market. The US Dollar’s Value Is Down—and These 3 Investments Are Way, Way Up On this episode: What has been going on with the dollar? A lot of worried investors are likely asking the same question: How is the stock market going up in this macroeconomic environment? And why are bonds doing well? You have written about the implications for a declining dollar. The dollar and gold typically compete as safe haven assets. It looks like gold is winning this year. Why is that? International stocks are outperforming US stocks this year. How does currency play into this? Our colleague Morningstar Inc portfolio strategist Amy Arnott joined me on Investing Insights for the Oct. 24 episode. She said investors might be underweight in international stocks despite recent performance. What case would you make to convince folks to consider increasing their overseas exposure? Emerging-markets debt is another asset class winning thanks in part to the dollar. Why does Morningstar find this fixed-income segment attractive? What risks could threaten the dollar’s dominance in the future? Why should everyday investors who are saving for retirement or other goals care about whether the dollar falls or rises? And how can they hedge their bets? Earnings season is underway. You’ve written about how it can be tempting to tweak a portfolio when companies share their forecasts. What should investors keep in mind? In this week’s Markets Brief, you wrote about how optimism about Tesla’s unproven future growth opportunities highlights what’s going on in the broader market? Can you explain? What are you keeping an eye on for next week’s column? Watch more from Morningstar: 2025’s Winners and Losers, from Gold to Small Cap Stocks to the 60/40 Portfolio The Stock Market Is Ultra-Concentrated. Here’s How to Manage the Risks. New Crypto ETFs Are Coming. Here's How Investors Can Prepare Follow Morningstar on social: Facebook https://www.facebook.com/MorningstarInc/ X https://x.com/MorningstarInc Instagram https://www.instagram.com/morningstarinc/?hl=en LinkedIn https://www.linkedin.com/company/morningstar/posts/?feedView=all Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Plus, how patient investors can find opportunities in the financial services sector. Hosted by Simplecast, an AdsWizz company. See https://pcm.adswizz.com for information about our collection and use of personal data for advertising.

Over the past few years, just a few large-cap technology stocks have powered the stock market’s returns. That trend shows no signs of abating anytime soon, as demand for artificial intelligence continues to send the tech sector higher. A highly concentrated market can—and has—turbocharged returns, but it also comes with downsides. As tech stocks soar, fund investors may find themselves with portfolios that are significantly less diverse than expected thanks to the outsize influence of a handful of firms like Nvidia NVDA and Microsoft MSFT. Dominic Pappalardo, chief multi-asset strategist for Morningstar Wealth, discusses how today’s narrow market compares with history and how investors can mitigate concentration risk in their portfolios. Morningstar Wealth is part of a registered investment advisor, Morningstar Investment Management. https://www.morningstar.com/markets/whatever-happened-broadening-stock-market-rally On this episode: What do strategists mean when they talk about concentration risk? How did today’s narrow market develop? What forces and trends brought us here? How unusual is today’s narrow stock market compared with history? When the market has been concentrated in the past, what has caused that concentration to dissipate? Are the risks associated with high concentration greater for passive index investors? Why? Wall Street has been warning about concentration risk for the better part of two years. But stocks are still hitting record highs, and the weightiest stocks are still performing the best. Why do some strategists say they aren’t as concerned about concentration risk? Do investors really need to be worried? What are some strategies investors can use to mitigate the risk of a highly concentrated market without leaving too much upside on the table? What’s the most important thing investors should remember right now? What to watch from Morningstar. New Crypto ETFs Are Coming. Here's How Investors Can Prepare How Inflation, AI, and Budget Battles Will Shape the Stock Market in Q4 Is Your Dividend Income at Risk? Here’s How to Spot Dividend Traps Follow us on social media. Facebook: https://www.facebook.com/MorningstarInc/ X: https://x.com/MorningstarInc Instagram: https://www.instagram.com/morningstar... LinkedIn: https://www.linkedin.com/company/5161/ Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

ETF Share Classes Are a Go for Dimensional: Here’s What Investors Need to Know On this episode: What was your reaction to the SEC removing these regulatory hurdles? Let’s first start with the rule change regarding crypto ETFs. Can you explain what new investment choices could be available, and what would they track? How soon could firms release new crypto ETFs? They’re already spot crypto ETFs trading. Could new competition push down fees overall? How have crypto ETFs performed so far in 2025? What crypto ETFs do Morningstar consider solid choices for investors? Morningstar considers crypto a speculative or high-risk asset. Will you remind investors why that is? Let’s switch to the SEC’s other recent rule change. It has approved Dimensional Fund Advisors to add an ETF share class to its mutual funds. Can you explain what an ETF share class is and provide a brief history lesson on it? More than 70 asset managers have banded together to get permission to offer dual share class funds. How often does that happen, and why in this case? What do individual investors stand to gain from new ETF share classes? Let’s flip it. What could they lose? What is the takeaway for investors as a new wave of crypto ETFs and ETF share classes arrive? We talked on last week’s Investing Insights about how a US government shutdown would stop the release of economic data, like the monthly jobs report. How could a shortage of data affect the Federal Reserve and others who depend on this information? Let’s discuss this week’s Markets Brief column. You wrote that the stock market could be on the verge of a so-called “melt up.” Can you explain what that is, and why cycles like this can be dangerous for investors? What are you tracking for next week’s Markets Brief column? What to watch from Morningstar. How Inflation, AI, and Budget Battles Will Shape the Stock Market in Q4 Is Your Dividend Income at Risk? Here’s How to Spot Dividend Traps Should You Hold Cash Investments After the Fed Cuts Interest Rates? Follow us on social media. Facebook: https://www.facebook.com/MorningstarInc/ X: https://x.com/MorningstarInc Instagram: https://www.instagram.com/morningstar... LinkedIn: https://www.linkedin.com/company/5161/