Data_Release_Notes


	This e-mail contains Morningstar Data Release Notes for July 2006. As always, we invite your comments and questions on our communications, products and services. Please contact any member of your account team. Thank you.


			Individuals \| Advisors \| Institutions


	July 2006

July 2006
Release Notes

Recap of Previous
Announcements

Morningstar
News

>	Morningstar Security ID (SECID) Changes for S&P Indexes
>	Investor Returns Data
>	Morningstar Rating: Ranks and Breakpoints Special Dates for Separate Accounts
>	Changes to Morningstar Category and Rating Scheme in Europe
>	Prospectus Expense Waivers and Caps
>	SEC Fund of Fund Changes
>	Q2 2006 Morningstar U.S. Market Commentary

>	Morningstar Security ID (SECID) Change
>	Morningstar U.S. Style Index Reconstitution
>	Morningstar Europe Rating Methodology Change for Money Market Funds
>	Sharpe Ratio Calculation Change for Offshore Funds

>	Launch of Morningstar Direct 3.0
>	Morningstar at Industry Shows

		Release Notes
		Morningstar Security ID (SECID) Changes for S&P Indexes
		As previously announced, Morningstar began tracking the price return counterparts of the S&P 100, S&P 400, S&P 500, S&P 600 and S&P REIT. To accommodate this enhancement, Morningstar needed to change SECIDs to accurately differentiate between performance strings. The following specifies the Morningstar SECIDs for all S&P indexes.


Total Return		New SECID

Standard & Poor's 100 TR		XIUSA04GQK

Standard & Poor's Midcap 400 TR		XIUSA04GQL

Standard & Poor's 500 TR		XIUSA04G92

Standard & Poor's Smallcap 600 TR		XIUSA04GQM

Standard & Poor's 1500 TR		XIUSA04GQN

Standard & Poor's REIT TR		XIUSA04GS5


"TR" (Total Return)-TR return variants were assigned new SECIDs: Includes daily reinvestment of dividends. Clients wishing to reflect Total ReturnTR performance will need to map to the new SECIDs.

Price Return

SECID

Standard & Poor's 100 PR

XIUSA000O8

Standard & Poor's Midcap 400 PR

XIUSA000O9

Standard & Poor's 500 PR

XIUSA000OA

Standard & Poor's Smallcap 600 PR

XIUSA000OB

Standard & Poor's 1500 PR

XIUSA000LL

Standard & Poor's REIT PR

XIUSA000LK

"PR" (Price Return)PR return variants utilized old SECIDs: Does not include reinvested dividends. The price return variant requires no additional programming.


		Clients wishing to track the index that more closely depicts what Morningstar previously stored for these six S&P indexes should use our TR (Total Return) Variant. The TR variant provides a more meaningful comparison for funds that reinvest their dividends. If you have any questions, please contact your Relationship Manager.

		Investor Returns Data
		Beginning with Sept. 30, 2006 data, Morningstar will calculate investor returns for U.S. open-end and exchange-traded funds. Investor returns (also known as dollar-weighted returns) measure how the typical investor in that fund fared over time, incorporating the impact of cash inflows and outflows from purchases and sales. Investor returns will be available in numerous Morningstar products. A fact sheet will be available in the August Release Notes.

		Morningstar Rating: Ranks and Breakpoints Special Dates for Separate Accounts
		As announced in June, beginning with July 31, 2006 data, Morningstar will provide a type of percentile rank for Morningstar Risk-Adjusted Return (MRAR) based on the number of distinct portfolios in a category, rather than the number of share classes. This is more consistent with how the Morningstar Ratings are assigned, so these fractional ranks will better align with the rating levels. Also, Morningstar will calculate rating breakpoints in decimals, rather than as integers. In cases where no fund falls exactly on the breakpoint, the last fund for the higher rating group will be the fund just shy of the breakpoint. June data for Separate Accounts, which is run July 28, will be calculated using the new fractional shares breakpoint methodology. This is due to production timing and to ensure consistency in rating and ranking calculations for July published products. For more information, please see the Morningstar Rating methodology and the supplemental documentation about fractional weights.


		Changes to Morningstar Category and Rating Scheme in Europe
		As of Oct. 31, Morningstar Europe will add approximately 30 new fund categories to its existing Morningstar Category scheme. Amongst others we will introduce absolute return categories, target date categories, more granularity in fixed income categories and single country categories within the Euro zone. The enhanced classification scheme will be used by our European and Hong Kong operations. At the same time, Morningstar Europe will also expand the time periods used for the European Rating system, bringing the system in line with Morningstar in the U.S. Five and 10 year ratings will be available, and the Morningstar Overall Rating will be a weighted average of the three-, five- and ten-year ratings. Morningstar will also incorporate back-end loads in the rating calculations for funds domiciled in Europe and offshore, as per our U.S. methodology.

		Prospectus Expense Waivers and Caps

		In order to expand Morningstars coverage of fund fees and expenses, we now collect several new expense-related data points from U.S. prospectuses and/or 497s (prospectus amendments):
		Expense Waivers
		Also referred to as expense offsets, expense reimbursements etc., represent the amount the U.S. fund company waives or assumes in order to keep the funds actual (net) expenses low. A company may reduce different components of overall expenses: management fee, 12b-1 fee, other fees, etc. If the prospectus discloses which component is being waived, Morningstar will capture this information as waiver type. Expense Waivers may be voluntary or contractual, and can be set to expire at a particular date or timeframe. Morningstar assumes a waiver is voluntary if no disclosure is made in the prospectus to the contrary. Morningstar collects waiver expiration dates if these are disclosed in the prospectus.
		Expense Ratio Cap
		States the highest level of expenses the U.S. fund company is willing to charge its shareholders. The funds actual total annual operating expenses may be higher or lower than this cap. If the Gross Expense Ratio is higher than the expense cap, the fund company will typically waive the amount exceeding the cap in order to bring the Net Expense Ratio to the cap level. In rare cases, a fund company may cap its expenses and fail to honor this cap. Expense caps may also be voluntary or contractual, and can be set to expire at a particular date or timeframe.
		Fund companies may also disclose additional information with regards to fees and expenses that doesnt fit neatly into any of the categories above. If this information is relevant, Morningstar will collect it as Notes. We anticipate waiver and cap information to be ready in Q4 2006.

		SEC Fund of Fund Changes
		Recent changes to SEC regulation will require fund of funds to disclose the aggregate expense amount charged by the fund and any fund in which the fund of funds invests. Morningstar is aware of this change and will capture the enhanced expense data as it becomes available.

		Q2 2006 Morningstar U.S. Market Commentary
		Fears of inflation and uncertainty regarding the sustainability of corporate profits led to a market sell-off late in the second quarter. Volatility rudely imposed itself on investors accustomed to calm after the end of the bear market in 2002. All Morningstar equity indexes except the Morningstar Large Value Index posted losses for the quarter, and the Morningstar US Market Index shed 1.8% over the same period, but still managed to post a gain of about 3.3% for the year to date. Smaller-cap and more value-oriented indexes are outperforming for the year, but fell harder in the second quarter. Please click here to read the full report. If you would like to receive future copies of Morningstar Indexes' weekly or quarterly Market Commentary reports, please register here.

		Recap of Previous Announcements
		Morningstar Security ID (SECID) Change
		We have modified the assignment of security identifiers. Morningstar no longer specifies a fund universe within the Morningstar SECID for newly activated funds. All Morningstar security identifiers now 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 has 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.

		Morningstar U.S. Style Index Reconstitution
		On June 13, 2006, Morningstar Indexes announced reconstitution of the Morningstar US Market Index and Style Index family. The Morningstar US Market Index, a broad market index targeting 97% of the U.S. market by capitalization, is the basis for Morningstar's family of 16 style indexes. Reconstitution of the Morningstar Style Index family occurs twice annually in June and December. To read the full announcement and get summary statistics, including a data fact sheet and a list of stocks added and deleted from the index, please click here.


		Morningstar Europe Rating Methodology Change for Money Market Funds
		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.

		Sharpe Ratio Calculation Change for Offshore Funds
		Effective May 31, 2006, Morningstar modified the Sharpe Ratio calculation for offshore funds to use risk free rates corresponding to the investor's domicile, regardless of where the money is invested. Previously, t o calculate the Sharpe ratio of a Swedish fund from the perspective of a US investor we subtracted ML SEK LIBOR 1-Mth rate from the SEK return and then converted the result to USD. Now, to calculate the Sharpe ratio of a Swedish fund from the perspective of a US investor, we convert the return from SEK to USD and then subtract the U.S. 3 mo T-Bill from the result. Our rationale is that the US investor investing in a SEK fund should compare the fund to the US risk free rate (T-bill) as opposed to the risk free rate appropriate for Swedish investors. Please refer to the table below for the currencies and their corresponding risk free rates:



Currency		Risk Free Rate

SEK		ML SEK LIBOR 1-Mth Const Mat (LOC)

NOK		ML NOK LIBOR 1-Mth Const Mat (LOC)

GBP		ML GBP LIBOR 1-Mth Const Mat (LOC)

DKK		ML Danish Kr LIBOR 1-Mth Const Mat (LOC)

EURO		ML D Mark LIBOR 1-Mth Const Mat (LOC)

CHF		ML CHF Libor 1-mth Const Mat (LOC)

USD		US 3-month T-bill

		Morningstar News
		Launch of Morningstar Direct 3.0
		We are happy to announce the release of Morningstar Direct 3.0. This release includes significant functionality and navigational enhancements, along with the addition of two new data universes: the stocks database and the ownership database. Please click here for details on the enhancements contained in this release. We are confident that these upgrades will deliver improved efficiencies and better help you address your business challenges. Morningstar Direct clients received full details via e-mail earlier this month. If you have questions about Morningstar Direct, please send an e-mail to MorningstarDirect@morningstar.com.

		Morningstar at Industry Shows
		Morningstar will exhibit at the Profit Sharing Council of America (PSCA) National Conference, Sept. 21-23, on Amelia Island, FL., at the 15th ALFI & NICSA Investment Funds Forum, Sept. 26-27, in Hemicycle Luxembourg-Kirchberg, at the Pensions and Investments (P&I) West Coast Conference, Oct. 9-11, in San Francisco, and at the National Association of Variable Annuities (NAVA) Annual Conference, Oct. 13-15, in New York City.

		Data Questions
		Contact your account team or our data quality department: U.S. 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 Europe E-mail: dataquestions.uk@morningstar.com Phone: +44 20 3107 0070 Fax: +44 20 3107 0001 Mailing address: Data Question Morningstar Europe 1 Oliver's Yard, 55-71 City Road, London EC1Y 1HQ United Kingdom



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