Morningstar Magazine - February/March 2014 - 6

Contributors

Lee Davidson, Warren Miller, and
Magdalena Mroczek
When we started exploring story ideas
for this issue's theme, "Where to be active,"
our first thought was to tap Morningstar's
new quantitative research team, which was
formed in 2013 and is headed by Warren
Miller, who was integral in the creation of
Morningstar's quantitative equity and credit
ratings. His team is tasked with deriving
analytically rigorous tools and methodologies for investors.
Readers can get a sense for that work in
"Where It Pays to be an Active Fund-Picker"
(Page 36). In this article, team member
Lee Davidson, a former exchange-traded-

fund analyst, switches gears from his
passive roots and looks at when it makes
sense to use active management by
weighing the low fees of an index offering
against the potential for a manager to
outperform. Davidson's effort is complemented by "The Valuation Angle of Active
Investing" (Page 39). Author Magdalena
Mroczek, who was previously the senior
editor of several Ibbotson Associates data
yearbooks, uses valuation dispersions within
equities categories and regions as a gauge
for when it is appropriate to use active or
passive management strategies. "The price/
fair value ratio can be used as more than
just a valuation measure. By looking at the
valuation dispersions of various equity
categories, we can pinpoint the greatest
active investment opportunities," she says.
This kind of research says a lot about how
far investment analysis has come. Miller
puts that point into context in "Preparing for
the Next 50 Years" (Page 8), the first
installment of a regular "Letter From"
column by a member of the magazine's
advisory board. Miller looks at innovations of
the past 50 years and takes a shot at
predicting which trends could shape the
investing world over the next five decades.

Editor-in-Chief Jerry Kerns
Associate Editor Rob Wherry
Editorial Board David Blanchett, Joel Bloomer, Heather Brilliant,
Scott Burns, Paul D. Kaplan, Kunal Kapoor, Haywood Kelly,
Grant Kennaway, Thomas Idzorek, Dan Lefkovitz, Warren Miller,
Daniel Needham, Don Phillips, Jeffrey Ptak, Hal Ratner,
Christopher Traulsen
Contributors Basili Alukos, Karen Andersen, Rachel Barkley, Valerio
Baselli, Lee Davidson, Christopher Davis, Kevin Dwyer, Stephen
Ellis, Robert Goldsborough, Michael Herbst, Robert Johnson, Jocelyn
Jovene, Russel Kinnel, Magdalena Mroczek, John Rekenthaler,
Michael Rawson, Carl Richards, Chiho Shimada, James Sinegal,
Kate Stalter, Christine St. Anne, Iris Tan, Emma Wall, Peter Warnes,
Adam Zoll
Art Director Alexander Skoirchet
Production Designers Regina Comito, Michael Pettit
Illustrator Lloyd Miller
Photographer Shawn Henry
Publisher Leslie Marshall
Director of Advertising Sales Mary Uribe
Regional Sales Directors Dan Atkinson, Tony Lignelli,
Stuart Roge
Morningstar, Inc.
Chairman and CEO Joe Mansueto
Managing Director, Design David Williams
Director, Corporate Marketing Kristin Mateja
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Lloyd Miller

Morningstar February/March 2014

It would have been easy for graphic designer
Lloyd Miller to get bogged down in some of
the complex investing themes featured
in this issue. Instead, Miller took a simpler
approach to generating the illustrations.
"In thinking about the images for this issue,
I found myself adapting everyday objects
and forms as my starting point to bring the
articles to life," he says. "This approach is
beneficial because it renders complex
topics understandable and often injects a
note of humor." Miller, who is based in
New York, has had his work published in The
New York Times, The Wall Street Journal,
The Washington Post, Esquire and Fortune,
among other publications.

Data Questions +1 312 696-6600
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Morningstar Magazine - February/March 2014

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