Dear Morningstar Clients,
This e-mail contains Morningstar Data Release Notes for July 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
*Data Release Notes Now International
*Methodology Change for Separate Accounts, Hedge and Custom Funds
*Changes to European Morningstar Categories
*US Essentials - Testing Period Ends in July
RECAP OF PREVIOUS ANNOUNCEMENTS
*Fund Category Review - US
*Fund Activation Status During Performance Audits
NEWS FROM MORNINGSTAR
*Morningstar at Industry Shows
*Hedge Fund Database Update
*Data Questions
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Morningstar Data Release Notes � July 2005
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*Data Release Notes Now International
Effective with this issue, we have combined the content of our US and international Data Release Notes into one newsletter. The combined newsletter will continue to be published mid-month, and will include content of interest to clients around the world.
*Methodology Change for Separate Accounts, Hedge and Custom Funds
Effective July 31, 2005, for investment vehicles reporting rates of return rather than unit values, we will now calculate trailing and calendar returns for periods where the inception date is the first business day of the period. Previously, we required an inception date prior to the period in order to show a trailing return. Please note that this change only applies to rate of return investment vehicles; unit value vehicles� trailing returns calculations will still require an inception date prior to the performance period.
*Changes to European Morningstar Categories
Effective with October month-end, we will update our European Morningstar Categories. We will introduce style-based differentiation within large capitalization categories in Europe, North America, UK, and Global equity. We will also introduce more detailed, country-based categories in Asian equity categories. In addition, the sector-based categories will be realigned to more closely follow Morningstar Sectors. Please click here for more details.
*Essentials Data License � Testing Period Ends this Month
As previously communicated, we�ve made some enhancements to the format and delivery of the U.S. Open-End Essentials Data Feed, and have been testing the new format with clients. Effective in August, Open-End Essentials files will be posted to the FTP site and will no longer be delivered via email. Please contact your account team if you have any questions.
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Recap of Previous Announcements
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*Quarterly Fund Category Review � U.S.
Thank you to all who participated in the recent open-end fund quarterly category review. New category assignments and the resulting Morningstar Rating(TM) were posted on our Web sites on June 3. The next review will be held in August, and will include only funds with one year of history or less.
*Fund Activation Status During Performance Audits
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 risk being excluded from Morningstar�s data feeds, advisor products and printed materials. Once the data is corrected and verified, we will immediately reactivate the fund.
Because of 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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News from Morningstar
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*Morningstar at Industry Shows
Morningstar will exhibit at the GAIM Fund of Funds Conference in New York, Sept. 19-21, and at the Profit Sharing Council of America National Conference in San Diego, CA, Sept. 21-23. And we hope to see you at the National Association for Variable Annuities Annual Conference in New York, October 23-25.
*Hedge Fund Database Update
As previously announced, we launched our new hedge fund database in Morningstar Direct in early March. Currently, our hedge fund team consists of a core group of about seven people. We plan to hire a few senior hedge fund research analysts to fill out this team. The research analysts will be responsible for further developing our methodology for hedge fund analysis and providing written analyst reports on individual hedge funds.
*Data Questions
Contact your account team or our data quality department:
E-mail: dataquestions@morningstar.com
Phone: 312-696-6600
Fax: 312-696-6019
Mailing address: Data Questions
Morningstar, Inc.
225 West Wacker Drive
Chicago, Illinois 60606
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