Dear Morningstar Clients,
This e-mail contains Morningstar Data Release Notes for September 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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DATA RELEASE NOTES
*Fund Category Review � U.S.
*Methodology Change for Trailing Price Ratios for Portfolios
*Index Changes
RECAP OF PREVIOUS ANNOUNCEMENTS
*Changes to European Morningstar Categories
NEWS FROM MORNINGSTAR
*Morningstar at Industry Shows
*Hedge Fund Database Update
*Data Questions
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Morningstar Data Release Notes � August 2005
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*Quarterly Fund Category Review � U.S.
Thank you to all who participated in the recent fund category review in the U.S. New categories and the Morningstar Rating(TM) were available on our Websites on Sept. 6. The next U.S. category review will begin in mid-November and will include all funds. Category changes will be effective with November month-end processing, and will be available on the third business day of December.
* Methodology Change for Trailing Price Ratios for Portfolios
Effective November 30, 2005, we will make a slight change to the methodology for calculating trailing-12-month (TTM) price-to-earnings, price-to-book, price-to-sales, and price-to-cash-flow for funds and other portfolios. We will now use a harmonic weighted average, rather than an arithmetic weighted average. The harmonic method prevents outliers from skewing the result, and it is consistent with our existing methods for calculating prospective price ratios. This change will not impact the Morningstar Style Box assignments for portfolios. For more information, please see the methodology document.
*Index Changes Effective Dec. 16
Later this year, the index provider will split the six Barra indexes listed below into two subgroups. The new indexes will be named �style index� and �pure style index.� Morningstar has selected the �style� indexes, the option with performance history and methodology that most closely resembles the previous indexes. Effective Dec. 16, these indexes will be renamed in our database, and back history re-populated with new data going back 10 years to July 1995. Please contact your account team if you have any questions.
Current Name Style Index, Name as of Dec. 16
Barra Large Cap Growth S&P 500/Citigroup Growth
Barra Large Cap Value S&P 500/Citigroup Value
Barra MidCap Growth S&P MidCap 400/Citigroup Growth
Barra MidCap Value S&P MidCap 400/Citigroup Value
Barra SmallCap Growth S&P SmallCap 600/Citigroup Growth
Barra SmallCap Value S&P SmallCap 600/Citigroup Value
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Recap of Previous Announcements
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*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.
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News from Morningstar
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*Morningstar at Industry Shows
Don Phillips, Morningstar managing director, will be speaking at the Institute of Financial Planning Forum in Leicestershire in the U.K. on Oct. 19-20. Anthony Serhan, director of consulting for Morningstar Australia, will be speaking at the Self-Managed Super Funds Conference at the Four Seasons Hotel, Sydney, Oct. 5-6.
Morningstar will exhibit at the Pensions & Investments Defined Contribution Conference in San Francisco, Oct. 9-11, at the National Association for Variable Annuities Annual Conference in New York, Oct. 23-25, and the Australian FPA Conference at the Gold Coast Convention & Exhibition Centre, Nov. 16-18.
*Hedge Fund Database Update
The Morningstar hedge fund database now includes more than 2,000 global hedge funds. At present, the hedge fund data in Morningstar Direct is used primarily by hedge funds of funds, family offices, consultants, mutual fund companies and other investment managers. The data will also be of interest to hedge fund administrators, prime brokers, and hedge fund firms that are interested in data for competitive research purposes. Please contact your account team for more information.
*Data Questions
Contact your account team or our data quality department:
E-mail: dataquestions@morningstar.com
Phone: +1 312-696-6600
Fax: +1 312-696-6019
Mailing address: Data Questions
Morningstar, Inc.
225 West Wacker Drive
Chicago, Illinois 60606
USA
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