The paper portfolios will debut in the group’s newly revamped monthly newsletter, Morningstar StockInvestor, to be mailed in mid-July and will highlight the group’s approach to investing.
Slow and Steady
Although both portfolio’s will aim to outperform the S&P 500, the value oriented Tortoise portfolio is targeted at conservative equity investors, and maintains exposures to stocks that have lower-than-average valuation ratios.
The Tortoise portfolio comprises the following 12 stocks:
- Black & Decker
- Interpublic Group
- Jones Apparel
- Liz Claiborne
- Office Depot
- Service Corp International
Fast and Furious
The Hare portfolio on the other hand is designed for investors with a higher risk tolerance, holding stocks with stocks with higher-than-average valuation ratios, signifying loftier investor expectations. The 11 stocks held within this portfolio are:
- Boston Scientific
- Charles Schwab
- Knight Trading
- Sun Microsystems
In order to simulate the real-world experience of investors, the portfolios will assume:
- a $10 brokerage commission per trade,
- a 28% tax rate on all short-term capital gains,
- a 20% tax rate on long-term capital gains, and
- monthly dividends reinvestment.
The investment decisions will be made by:
- Mark Sellers, editor-in-chief of Morningstar StockInvestor,
- Pat Dorsey, director of stock analysis,
- Haywood Kelly, editor of Morningstar.com, and
- Morningstar’s senior stock analysts,
Composition updates and performance data for each portfolio will be published in Morningstar StockInvestor, along with a commentary on the portfolios.
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