We are modifying the assignment of security identifiers. Morningstar will no longer specify a fund universe within the Morningstar SECID for newly activated funds. Going forward, all Morningstar security identifiers will begin with FO, omitting FE, FC, FM, and FV. This practice eliminates the need for changes in SECID when a fund moves between universes (i.e. open-end and close-end universes) a recent trend in the fund industry. This is not a schema or structure change and therefore should have no effect on Licensed Data loading processes. For any process/tool where fund universe identification is based on Morningstar SECID, programming changes should be made to link to "Legal Type." "Legal Type" is a node/field within all data feed packages that identifies the fund universe. All package files will continue to be sent as separate universes within their respective FTP sites. Morningstar Direct clients should continue to use "Type" as the data point to identify fund universe. If you have any questions, please contact your Morningstar Account Team.

Effective May 31, 2006, the front-end loads for all money market categories have been capped at 0% for the Morningstar Rating calculation. The cap was previously set at 3%; we welcome feedback on this topic.

Beginning June 10, Morningstar will include U.S. government bonds within the AAA category in our credit quality breakdown, and discontinue the separate government category. This is consistent with practice at rating agencies such as Moody's and Standard & Poor's, and accommodates differences in implied risk that may exist among government issues from around the globe. This will not impact bond Style Box" for most funds; however, some funds may receive a revised assignment since credit risk is a component of the calculation.

Beginning with April 30, 2006 data, funds registered for sale in Europe have a five- and 10-year Morningstar Rating, in addition to the three-year rating that European funds have had since 2001. Five- and 10-year ratings are immediately available in Morningstar Direct, Morningstar's institutional research product; five- and 10-year ratings will become available in other Morningstar products over the course of 2006.

As of April 30, 2006, Morningstar now rates money market funds available for sale in Europe over a period of three years, using Morningstar Risk Adjust Return.

With the acquisition of Ibbotson Associates, Morningstar has expanded its data offerings by two key data setsStocks, Bonds, Bills, and Inflation and returns-based security classification data.

The Stocks, Bonds, Bills and Inflation data provides monthly total returns for twenty asset classes with much of the data dating back to 1926. This data is ideal for communicating market concepts to advisors and investors in newsletters, articles, and on Web sites, and for supporting internal research efforts. With 80 years of asset class information, the data brings an objective, independent historical perspective to communications.

The Morningstar Prospectus Summary is ideal for use in advisor and investor web sites and tools because the template presents prospectus data in one standard format, making comparisons faster and easier. Data is presented in four key sectionsFund Information, Share Class Specific Information, Fund Family Information and Fund Manager Informationin a PDF document with a link to the actual prospectus filing.

The Morningstar Hedge Fund Data License provides basic performance and operations data and statistics on more than 3,000 hedge funds. Use this data to create hedge fund fact sheets, conduct competitive research, and screen hedge funds for fund of hedge funds. This data can also power brokerage platforms and populate third-party software. Ideal for use by broker/dealers, software companies and fund of hedge fund managers, historical hedge fund performance data is also available.

A Morningstar Historical Data License provides firms with data to develop sales and marketing materials and tools using a historical perspective. With historical performance, portfolio information and Morningstar proprietary statistics, this data is also ideal for Web charts and tools, competitive analysis and, internal research.

Morningstar Investment Profilesclear, concise fund fact sheetsare now available on a monthly basis in a standard, one-page format for more than 17,000 funds. This new format utilizes the proprietary Morningstar statistics familiar to investors such as Morningstar Rating and Morningstar Style Box, and allows for insertion of a second page of company-specific information and disclosure language. Flexible, tiered pricing makes Morningstar Investment Profiles ideal for mutual fund and insurance companies of all sizes. And because of the standard format, integration time and costs are minimal. To find out more and see examples, please click here.

We are pleased to announce the upcoming release of Morningstar Direct 3.0. Coming soon, this release will include significant functionality and navigational enhancements, along with new content and databases. The release will include the stocks and ownership databases, along with additional Morningstar analysts' reports covering stocks, category reviews, market reviews, research, and our new Hedge Fund Research reports. Clients will be able to stay in touch with news on individual stocks and funds via feeds from Morningstar, Dow Jones and PR Newswire. To help clients maximize their investment in Morningstar Direct, we have created a Learning Center, dedicated to helping clients become power users enhancing their understanding of how to use Morningstar Direct and apply it to their business. Please click here for information about enhancements in the new release.

Morningstar will exhibit at the First Software Conference at the National Motorcycle Museum in the Midlands, U.K, at the 2006 Fund Forum in Monaco, July 4-7, at the Global Alternative Investment Management (GAIM) Europe Forum in Cannes, France, July 10-14, and at the Profit Sharing Council of America (PSCA) National Conference, Sept. 21-23, on Amelia Island, FL. And we hope to see many of you at the Morningstar Investment Conference, June 28-30, in Chicago, IL.