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Morningstar runs the numbers

Lewis Jackson  |  06 Dec 2021Text size  Decrease  Increase  |  
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The five largest US stocks contributed 37% of all the Morningstar US index's returns in 2020, wrote Tom Lauricella and Lauren Solberg in their analysis of the fading impact of mega stocks: “Last year, the five largest stocks—Apple, Microsoft, Amazon.com, Meta Platforms (formerly known as Facebook), and Tesla—contributed a massive 37% of the market's returns. In contrast, this year through late November, the five largest stocks—the same group with the exception of Alphabet GOOG taking the place of Meta—contributed just 8% of market returns. That compares with an average of 3% from 2009 through 2019.”


Oil markets tumbled 12% at the end of November as Omicron reignited fears economic activity could slow, I wrote in my stock market recap for the month: “The energy sector shed almost 9% with heavyweights such as Woodside Petroleum down roughly the same amount. The decline tracked the steady move down in oil prices. The global benchmark Brent Crude was 17% lower for the month including a 12% one-day fall last Friday. Iron ore prices bottomed out mid-month around US$ 91 before crossing the US$100 mark by month end, finishing back where they started.”

$15 billion

Global fund manager T. Rowe Price is sitting on a US$15 billion stake after its private investment in electric truck maker Rivian blew up in the year’s biggest IPO: “Early investors like T. Rowe Price watched their holdings soar in value as Rivian staged the year’s biggest IPO earlier this month. After debuting on the NASDAQ on 10 November at US$78, shares surged as high as US$172 in the first week before settling to $US119 at Monday’s close. T. Rowe Price remains one of the largest shareholders, with a 15.35% stake according to Pitchbook. The holding would be worth roughly US$15 billion today. Amazon and Ford are also major shareholders, with 18% and 11% stakes, respectively.”


A retirement portfolio made up of 100% equities outperformed portfolios with a mix of stocks and bonds, with a higher withdrawal rate and a larger final value, wrote John Rekenthaler in his review of asset allocation for retirement: “Stocks, stocks, and more stocks! By this measure, the competition between the aggressive and moderate portfolios is no contest. Across all periods, the 100% equity allocation steamrolls any strategy that contains bonds. That even occurred from 1930 though 1959, when the safe withdrawal rate for the all-equity portfolio was almost a full percentage point below that of the stock/bond allocation.”

Charts from last week

Putting November's stock market dip in perspective (here)

Active managers are moving into the world of ETFs (here)

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is a reporter and data journalist with Morningstar. Tweet him @lewjackk or get in touch via email

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