Learn To Invest
Stocks Special Reports LICs Credit Funds ETFs Tools SMSFs
Video Archive Article Archive
News Stocks Special Reports Funds ETFs Features SMSFs Learn


Morningstar runs the numbers

Lex Hall  |  02 Mar 2020Text size  Decrease  Increase  |  
Email to Friend

We take a numerical look through this week's Morningstar research. Plus, our most popular articles and videos for the week ended 28 February.


The number of days it took for the US's broadbased S&P500 to post its quickest plunge in history. "While it remains very difficult to predict the impact that the coronavirus will ultimately have, it is worth highlighting that share and bond markets, in general, are overvalued," said Morningstar Investment Management. "This means that the risk of losing money is elevated and markets remain vulnerable to any bad news, whatever the cause. In this regard, our portfolios remain defensively positioned, holding more cash than we otherwise might."

20 per cent

That’s the amount of global manufacturing activity China accounts for. Global supply chains are deeply interwoven into the Chinese culture and labour force and they’re reliant on the growing middle class for customers, says Morningstar’s head of equity research Peter Warnes. As the world’s largest single manufacturer, China has few if any rivals that can match it in terms of infrastructure, labour force, scale and productivity - and therein lies the problem. “Making meaningful changes to supply chains is easier said than done and very expensive. A wholesale move out of China would be almost impossible and potentially a financial disaster,” Warnes says.


The average annual salary, according to the Australian Bureau of Statistics. The average weekly ordinary time earnings for full-time adults in Australia rose to $1659 in November 2019, up 3.2 per cent from a year earlier, ABS figures reveal. The more accurate reading of wages growth, the seasonally adjusted Wage Price Index, rose 2.2 per cent through the year to 31 December. Private and public sector wages rose by the same rate – their lowest growth levels since the start of the index in December quarter 1997. Labour underutilisation – too many people getting fewer working hours than they want or need – was the main factor suppressing wages growth, writes Nicki Bourlioufas.


That’s the number of self-managed super fund trustees the tax office wrote to last August, warning stiff penalties apply for those who misuse their SMSF. You're free to hold your choice of assets in your SMSF – provided it's permitted by super laws and your fund's trust deed, the ATO said in its updated explainer last week. "Super assets must also pass the sole-purpose test, which stipulates they must be solely dedicated to building a retirement nest-egg," writes Morningstar’s Glenn Freeman. "You're not prevented from investing your entire SMSF portfolio in a sole asset – a business property is a popular choice – or a single sector. But your documentation must make it clear that you understand the risks associated with this lack of diversification."


That’s the number of ETFs Morningstar has ceased coverage of. Key among them is BetaShares' "yield maximiser" passive exchange-traded fund (ASX: YMAX), which Morningstar deemed was performing poorly and carrying high fees. Since its inception in late November 2012, YMAX has delivered 6.61 per cent a year, whereas the Australia 20 index has delivered 10.12 per cent, BetaShares says on the fund prospectus. Morningstar analyst Donna Lopata says: "Given YMAX’s multifaceted approach, it is relevant to compare the fund with a variety of yardsticks; however, our previous reports observed that no matter what comparison we made, YMAX’s total returns were unimpressive."

Most popular articles

Top videos


Investing Compass
Listen to Morningstar Australia's Investing Compass podcast
Take a deep dive into investing concepts, with practical explanations to help you invest confidently.
Investing Compass


is senior editor for Morningstar Australia

© 2022 Morningstar, Inc. All rights reserved. Neither Morningstar, its affiliates, nor the content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for its use or distribution. This information is to be used for personal, non-commercial purposes only. No reproduction is permitted without the prior written consent of Morningstar. Any general advice or 'regulated financial advice' under New Zealand law has been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), or its Authorised Representatives, and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives, financial situation or needs. For more information, refer to our Financial Services Guide (AU) and Financial Advice Provider Disclosure Statement (NZ). Our publications, ratings and products should be viewed as an additional investment resource, not as your sole source of information. Morningstar’s full research reports are the source of any Morningstar Ratings and are available from Morningstar or your adviser. Past performance does not necessarily indicate a financial product's future performance. To obtain advice tailored to your situation, contact a licensed financial adviser. Some material is copyright and published under licence from ASX Operations Pty Ltd ACN 004 523 782. The article is current as at date of publication.

Email To Friend