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February 2006
Release Notes |
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Recap of Previous
Announcements |
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Morningstar
News |
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Release Notes
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U.S. Quarterly Fund Category Review |
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This quarter�s review began on Feb. 14, with the appeals period concluding on Feb. 21. Thank you to all who participated. Category changes will be effective with February month-end processing, and results will be available on our Websites on March 3. |
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New Categories and Broad Asset Class for U.S. Portfolios |
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As previously announced, effective Feb. 28, 2006, Morningstar will add five new categories and one broad asset class to its current classification system for portfolios domiciled in the U.S. This change will affect all data universes (open-end, closed-end, ETF, VA, etc.). The new categories are: Long-Short, Inflation-Protected Bond, Target-Date 2000-2014, Target-Date 2015-2029, and Target-Date 2030+. The new broad asset class is Balanced, which will be added to the current set of four broad asset classes: U.S. Stock, International Stock, Taxable Bond, and Municipal Bond. Broad asset classes are used to help individuals narrow a search for funds; they do not impact the Morningstar Rating. The Balanced broad asset class will contain the following categories: Conservative Allocation, Moderate Allocation, World Allocation, Convertibles, and the three new target-date categories. |
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Barron�s to Feature Morningstar Data on Separate Accounts in New Section |
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Premiering in the Feb. 20 issue of Barron's, the new section entitled "Separate Accounts Quarterly Review� will include articles about the separate account industry accompanied by a series of data tables. To help investors compare and analyze these investments, Morningstar is providing statistics such as total returns, fee information, and the Morningstar Rating� for our entire database of approximately 5,000 separate account strategies (including retail and institutional accounts) from about 1,000 money managers. The new section will appear in print and online editions on a regular basis.
This initiative furthers our mission of helping investors reach their financial goals by providing both individual and professional investors access to separate account information for the first time. Until now, separate account performance and operations information has largely only been available from advisors or investment consultants. |
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New Morningstar Indexes: Dividend Leaders, Dividend Composite Indexes |
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We are pleased to announce the launch of the Morningstar Dividend Leaders Index, a diversified portfolio of the 100 highest yielding stocks with a consistent history of paying dividends and the ability to sustain their dividends going forward. This index is unique because stocks are weighted in proportion to the dividends available to investors. Both the amount of the dividend paid and the size of the company are given due importance. In addition, Morningstar applies a sustainability screen for each stock that considers forward-looking measures and favors companies that are expected to have sufficient earnings to cover future dividends.
We also launched the Morningstar Dividend Composite Index to serve as a benchmark for performance measurement. The Dividend Composite Index contains all dividend-paying stocks in the Morningstar� US MarketSM Index that meet the dividend consistency and sustainability screens. The Dividend Leaders Index consists of the 100 highest yielding stocks that make up the Dividend Composite Index.
The Dividend Leaders Index and the Dividend Composite Index are newest members of Morningstar�s family of indexes. Morningstar�s other 16 indexes, which were introduced in October 2002, track the U.S. equity market by capitalization and investment style and are based on the same methodology as the Morningstar Style Box�. For more information about all of Morningstar�s indexes, visit http://indexes.Morningstar.com. |
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S&P Sector Indexes Added |
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Please click here for details and definitions of the S&P Sector Indexes added to the database in late January. In addition, Morningstar recently added the FTSE Global Style Index Series (international indexes), the FTSE4Good Index Series (indexes of socially responsible companies) as well as many of the S&P/ASX and S&P/TSX indexes (indexes specific to Canada and Australia). |
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Recap of Previous Announcements
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U.K. Life and Pensions Database |
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To provide investors with data to make better investment decisions, Morningstar U.K. is integrating life and pension fund data into current Morningstar products. We are working directly with fund companies to collect the data that will allow life and pension funds to receive a Morningstar Rating and a Morningstar Style Box. The new data will also allow financial advisors and institutional investors to conduct more thorough portfolio construction, research, and analysis. |
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Index Name Changes |
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Please click here for a list of recent index name changes. |
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European Funds Expense Data |
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To provide investors in European funds with the same fee transparency found in markets like the U.S., Australia, and Canada, Morningstar Europe has begun collecting and analyzing total expense ratios for funds registered for sale within Europe. Total expense ratios will be monitored along with annual management charges and other expenses, giving investors more ways to evaluate their investment choices. Fund families who wish to contribute their fund's expense data to our transparency efforts should contact their local Data Relationship Manager |
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New U.S. Closed-end Data Points |
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Effective March 31, 2006, Morningstar will introduce several new U.S. closed-end data points: IPO NAV and Share Price, Preferred Issue Shares Outstanding, Undistributed Net Investment Income (UNII), Earnings Per Share (EPS), Modified Duration, and Bond Call Schedule. Additionally, we will add a flag to highlight all closed-end funds that utilize a covered call investment strategy. |
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2005 Morningstar U.S. Market Commentary |
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Stocks ended 2005 in the black, continuing an equities rally for the third straight year after the bursting of the technology bubble sent stocks reeling from 2000 through 2002. All nine Morningstar Style Indexes finished the year in positive territory, with mid-caps leading the way, and growth stocks showed signs of life. Please click here to read the full report. |
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Ten Largest Offshore Funds |
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Morningstar provides coverage of more than 11,000 offshore investment funds. Offshore funds are mutual funds that are domiciled in areas like Luxembourg, Dublin, and the Channel Islands, and they can have certain tax advantages for investors. Please click here for a list of the ten largest offshore funds in Morningstar's database, listed by market value. For more information regarding Morningstar's offshore database capabilities, please contact your account team in your local Morningstar office. |
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The Morningstar Rating� for U.S. Exchange-Traded Funds |
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Morningstar plans to introduce a Morningstar Rating for exchange-traded funds (ETFs) domiciled in the U.S. using performance data through February 2006. The Morningstar Rating uses a scale of one to five stars to rank funds on risk-adjusted return against their category peers. ETFs will be rated based on the rating breakpoints for open-end categories, but they will not be included in the open-end population while those breakpoints are drawn. We will be reviewing our rating methodology for ETFs domiciled outside of the United States in early 2006. |
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Morningstar News
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Spotlight on China Funds |
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Morningstar currently covers 172 funds registered for sale in mainland China. Listed below are the ten largest funds from that database, according to the most recent portfolio holdings reported to Morningstar. Twelve global asset management firms have formed joint venture agreements in China, including companies like Fortis and ABN AMRO as detailed in the table below. Other joint ventures include Invesco Great Wall Fund Management, BOCI Merrill Lynch, and Guotai Junan Allianz Asset Management. |
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Fund Name |
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Category |
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Firm |
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Total Mrkt Val (USD) |
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| 1 |
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Industrial Convertible
Bond Hybrid |
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China�Allocation Funds |
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Industrial Fund Management Co.,Ltd |
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2,134,820,829 |
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| 2 |
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CMF Antai-Equity Fund |
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China�Equity Funds |
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China Merchants Fund Management Co., Ltd |
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22,132,862,200 |
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| 3 |
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Fortis Haitong Money Market Fund |
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China�Money Market Funds |
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Fortis Haitong Investment Management Co. |
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2,095,514,236 |
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| 4 |
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ChinaAMC Growth Fund |
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China�Equity Funds |
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China Asset Management Co.,Ltd |
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2,063,624,074 |
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| 5 |
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ABN AMRO XIANGCAI Sector Select A |
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China�Equity Funds |
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ABN AMRO XIANCGAI Fund Management Co.,Lt |
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2,030,057,676 |
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| 6 |
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China Southern Active Sector Alloca |
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China�Allocation Funds |
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China Southern Fund Management co.,Ltd |
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1,931,466,217 |
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| 7 |
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Harvest Income Growth Fund |
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China�Equity Funds |
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Harvest Fund Management Co.,Ltd |
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1,914,271,981 |
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| 8 |
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E Fund Strategic Growth Fund |
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China�Equity Funds |
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E Fund Management Co.,LTD |
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1,867,990,262 |
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| 9 |
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CMF Xianfeng Securities Fund |
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China�Allocation Funds |
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China Merchants Fund Management Co., Ltd |
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1,767,221,492 |
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| 10 |
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Tiantong Principal Guaranteed fund |
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China�Guaranteed Funds |
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TianTong Asset Management Co.,Ltd |
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1,708,638,313 |
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Morningstar at Industry Shows |
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Morningstar will exhibit at the Pensions and Investments East Coast Conference in Palm Beach Gardens, FL, Feb. 26-28; the American Society of Pension Professionals and Actuaries 401/k Summit in Orlando, FL, Feb. 26-28; and at the Money Management Institute Annual Convention in Boston, MA, March 15-17.
Don Phillips, our managing director, will be a keynote speaker at the World Series of Exchange-Traded Funds in Key Biscayne, FL, March 30-31.
Morningstar will sponsor the CFA Society of Chicago's Academic Research Conference on April 21, and will exhibit at the Association of Investment Management Sales Executives Annual Sales and Marketing Conference in Orlando, FL, April 23-25; and at the Investment Management Consultants Association Conference in Orlando, FL, April 30-May 3. |
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Morningstar Europe Unpacks the Moving Boxes |
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Morningstar has moved its London offices to One Oliver's Yard on City Road. Serving as both the local office for Morningstar UK, and the global headquarters for Morningstar in Europe, the new office boasts added capacity to house the expansion of Morningstar's global data capabilities. The move is an integral part of the comprehensive strategic expansion plan for Morningstar in Europe. The new address is 55-71 City Road London, EC1Y 1HQ, and the new phone number is +44 (0) 20 3107 0000. |
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Data Questions |
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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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�2006 Morningstar. All rights reserved. |
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This e-mail contains privileged and confidential information and is intended only for the use of the recipient. Any dissemination, distribution, or duplication of this communication without prior written consent from Morningstar is strictly prohibited. If you received this message in error please contact the sender immediately and delete the materials from any computer. You are receiving this e-mail because you are a Morningstar Data client, or because you asked that your name be added to the distribution list. If you wish to remove yourself from our institutional client communication list, please hit reply with �unsubscribe� in the subject line. If you would like to opt-in to this e-mail list please hit reply and include your full name, title, company name and address. We will be happy to add you to the list. The newsletter is free, and we never release these e-mail addresses to third parties. If you change your mind and no longer wish to receive this e-mail, we will quickly remove your name from the distribution list. |
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