Dear Morningstar Clients,
This e-mail contains Morningstar Data Release Notes for May 2005. As always, we invite your comments and questions on our communications, products and services. Please contact any member of your account team. Thank you.
Your Morningstar Team
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IN THIS ISSUE
*Fund Category Review
*Essentials Delivery Enhancements
*Fund Activation Status During Performance Audits
RECAP OF PREVIOUS ANNOUNCEMENTS
*New Expense Data Points
*Fund of Funds Expense Ratio Change
*Quarterly Fund Category Review
*Hedge Fund Database Update
NEWS FROM MORNINGSTAR
*Industry Shows
*Data Questions
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Morningstar Data Release Notes � May 2005
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*Quarterly Fund Category Review
The quarterly category review began on May 16, with the appeal period running until Friday, May 23. Complete details and instructions were sent via email on May 16, and the new categories will be effective with May month-end processing. New categories and the resulting Morningstar Rating(TM) can be seen on our Web sites on June 3. This review includes all funds, using portfolio data through March 31.
*Essentials Data License Enhanced
As announced last month, Open-End Essentials clients were notified of some enhancements to the format and delivery of their Essentials Data Feed. Test files are being posted on our FTP site for your review. Please be sure to retrieve and review the test files on the FTP site before the testing period ends in July. Effective in August, Open-End Essentials files will no longer be delivered via email. Please contact your account team if you have any questions.
*Fund Activation Status During Performance Audits
�Why is my fund missing from www.morningstar.com? It was there yesterday.�
As part of our commitment to data quality, Morningstar places funds �under review� if our quality assurance tests raise questions about the performance data. A fund may also be put under review if the latest data required for the production cycle is missing. In these instances, Morningstar will take the following action:
*Contact the fund
*If the data cannot be verified, deactivate the fund in Morningstar�s database
*Follow-up until data is received
If corrected performance data is not provided within 24 hours, funds will be restricted from view on www.morningstar.com and risk being excluded from Morningstar�s data feeds, advisor products and printed materials. Once the data is corrected and verified, the fund will be immediately reactivated.
Due to our extensive contacts within fund companies and data providers, funds are usually reactivated within 48 hours. If you have any questions regarding Morningstar�s performance audit procedures, please contact your relationship manager or data analyst.
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Recap of Previous Announcements
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*New Expense Data Points
As previously communicated, in response to client requests, Morningstar will be adding two data points to our database: Prospectus Gross Expense Ratio (Annual Operating Expense Ratio) and Prospectus Net Expense Ratio. These data points will reflect the current expenses of a fund and are not meant to replace what we consider to be a valuable data point, the annual audited expense ratio. However, many funds have been lowering their expense ratios, and these new data points capture the most current information from a prospectus or 497 filing in advance of an annual audit. This new data will be ready for May month-end data delivered in June. Please contact your account team for more information.
*Fund of Funds Expense Ratio Change
Effective with May month-end processing, Morningstar will deliver an aggregate expense ratio for fund of funds. This will replace the current data, which is limited to sponsor or wrap fees. The aggregate expense ratio is a more useful tool for investors comparing the costs of a fund of funds to other investments. We are able to make this change now because the presentation of expenses in SEC filings is more comprehensive.
*Hedge Fund Database Update
As previously announced, on March 2 our new hedge fund database launched in Morningstar Direct on March 2. As of April 2005, we track $250 billion in aggregate hedge fund assets, and 25% of the funds we track manage more than $100 million (US). We developed a classification system to help investors understand the different types of investment strategies used by hedge funds around the world. Please click here here to read about the category system developed for this new data. If you have questions about our hedge fund data, please contact your account team.
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News from Morningstar
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*Morningstar at Industry Shows
Morningstar will exhibit at the GAIM Europe Hedge Funds Conference in Lausanne, Switzerland, June 7-9, in booth 66; and at the SIA Technology Management Conference, June 21-23, at the Hilton New York in New York City. And we hope to see you at MAR�s Annual Mid-Year Conference on Alternative Investment Strategies, June 27-29, at the Palace Hotel, in San Francisco.
*Data Questions
Contact your account team or our data quality department:
Phone: 312-696-6600
Fax: 312-696-6019
E-mail: dataquestions@morningstar.com
Mailing address: Data Questions
Morningstar, Inc.
225 West Wacker Drive
Chicago, Illinois 60606
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