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November 2007
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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(Data Release Notes will now be sent during the first week of the month.) |
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Licensed Data Release Schedule |
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Licensed Data Release Schedule |
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New Email Address for Licensed Data |
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The Morningstar Licensed Data team will now be sending important data feed announcements from the new email address LicensedData@morningstar.com. Please add LicensedData@morningstar.com to your Address Book to avoid spam filters. |
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Variable Annuity Underlying Fund Morningstar Rating Change |
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Morningstar is changing our ratings for variable annuity underlying funds to compare with open-end mutual funds, effective Jan 31, 2008. In order to support this enhancement, the following changes will occur: Open-end funds that can be used in variable annuity subaccounts will be designated "available to insurance products" and any duplicate funds in the VA universe will be removed. These designated funds will be included in both the U.S. VA and U.S. open-end universes. Category averages for both U.S. VA underlying and U.S. open-end will include these funds. Please contact your account team for details. |
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U.S. and Europe Enhanced Category Trailing Returns |
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We are enhancing our methodology for calculating Morningstar Category trailing returns to adjust for obsolete funds and funds that have changed categories. This additional return data applies to U.S. and Europe open-end, closed-end and exchange-traded funds, variable annuity funds, money market funds, hedge funds and separate accounts. The new trailing return data for a category will now include all the funds that were in the category during the return period, including effects of funds that have changed categories--not just those that are in that category at end of the period. Additional category rankings will also be calculated based on these enhanced trailing returns.
Licensed Data clients will receive test files this month including both the old and new data points for the trailing averages, and this new data point will be an additional return in the data feeds in December. Morningstar Direct(SM) clients should check the Announcements area for implementation details and timing. |
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Recap of Previous Announcements |
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Group Variable Annuity Subaccount Morningstar Rating Enhancement |
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We now compare group variable annuities to open-end mutual funds when calculating Morningstar Ratings for funds. Previously, group annuities were compared to individual variable annuities, which tend to be structured differently than group annuities from a benefit and cost standpoint. This change gives advisors, investors, and plan sponsors a uniform rating system across the investments that are most commonly used in employer sponsored qualified plans. The new ratings currently appear in our Morningstar� Principia�, its CD-based investment research and planning software. The new ratings will appear in other Morningstar offerings in early 2008. For more information, please read our press release. |
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U.S. and Europe Enhanced Calendar Category Averages |
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We are enhancing our methodology for calculating calendar-year Morningstar Category averages to adjust for obsolete funds and funds that have changed categories. This methodology change applies to U.S. and Europe open-end, closed-end and exchange-traded funds, variable annuity funds, money market funds, hedge funds and separate accounts. The changes will affect aggregate calendar-year category averages and may also affect individual funds' percentile rankings within their categories. By including obsolete funds in the population when calculating calendar-year category averages, Morningstar's data will better reflect the reality of a category's historical returns. In making this adjustment, Morningstar is addressing the problems associated with survivorship bias-which is the tendency for performance results to skew higher as less successful funds are merged or liquidated away and are not included in the calculation.
Individual funds' calendar-year percentile rankings will also reflect any historical category changes. When the character of a fund's holdings changes over a sustained period of time, Morningstar reassigns the fund to a category that better reflects its portfolio positioning over the previous three years. The fund's ranking will now be measured against the category in which the fund was placed for the calendar year.
The calendar year averages and ranks will reflect the new methodology effective immediately. Please contact your account team for details.
Morningstar Direct(SM) clients should check the Announcements area for details. |
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Municipal Bond Sector Enhancements |
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Morningstar will be enhancing our Municipal Bond Sectors to more accurately reflect classification of collateral backing and use of proceeds for a portfolio's bond holdings. The new classification system expands the number of Super Sectors from 11 to 12, while also supporting a more granular level of 23 Primary Sectors and 43 Secondary Sectors, enabling investors to quickly evaluate the similarities and differences of funds. The new Super Sectors will be:
General Obligation
Advance Refunded
State Appropriated Tobacco
Non-state Appropriated Tobacco
Education
Wealth
Housing
Industrial
Transportation
Utilities
Water/Sewer
Misc. Revenue
The new Morningstar Municipal Bond Sectors will be available in Licensed Data feeds beginning with February 2008 deliveries. Morningstar Direct(SM) clients should check the Announcements area for details.
Municipal Bond Sector Fact Sheet |
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Enhanced Portfolio Statistics |
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As previously announced, Morningstar has modified our portfolio statistics to incorporate the economic impact of short positions and derivatives. This impacts all global portfolios and all types of investment products. Our Investment Consulting group and Licensed Data feeds began delivery of the new data in September. If you have not yet done so, please contact your relationship manager to test your loading processes to ensure that you are prepared to accommodate files with the new enhanced portfolio statistics.
Following are links to resources for this project:
Fact Sheet
Portfolio Reporting Template
Methodology Document
Data Point Inventory
Fact Sheet on Derivatives |
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Morningstar to Add New Categories for Separate Accounts |
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In the United States, there are now a sufficient number of U.S. Large Blend 130/30 separate accounts to form a new category called "Leveraged Net Long." Effective November 2007, we will assign a separate account strategy to this category when the equity percentage in gross short positions is at least 20% and the equity percentage in net long positions is between 80% and 120%. As such, this category is not limited to 130/30 strategies, but rather will also include 120/20, 140/40, etc., strategies. In addition to the Leveraged Net Long category, we will also add a "Market Neutral" category. Please contact your account team if you have any questions. |
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Revised Morningstar Category Classification for Hedge Funds |
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Morningstar has revised our methodology for hedge fund categories. Previously, category assignments were based on a review of the hedge fund's memorandum document, manager-provided investment strategy descriptions and supporting data, and conversations with portfolio managers. Going forward, our hedge fund analyst staff will adjust the assignment process to include cluster analysis and portfolio statistics acquired via surveys as additional factors to determine the appropriate category assignment. Morningstar supports 17 hedge fund categories, which map into five broad category groupings (Equity, Arbitrage, Global, Event, and Multi-Strategy).
Hedge Fund Category Methodology Document |
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Morningstar News |
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William Lyons, Former President and CEO of American Century Companies, Inc., Joins Morningstar's Board of Directors |
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Press Release |
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Morningstar Reports Third-Quarter 2007 Hedge Fund Performance |
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Hedge funds in Morningstar's database returned an average of 2.44% over the third quarter of 2007, outperforming the S&P 500 Index and the MSCI World Index in U.S. dollars. September gains of 3.7% overcame poor performance in July and August of 0.42% and negative 1.63%, respectively.
Press Release |
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ELEMENTS(SM) Exchange-Traded Notes Based on Morningstar� Wide Moat Focus(SM) Total Return Index Launched |
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On Oct. 18, the ELEMENTS(SM) platform launched exchange-traded notes (ETNs) based on Morningstar's proprietary Wide Moat Focus Total Return Index. The Wide Moat Focus ELEMENTS ETNs trades on the New York Stock Exchange Arca today under the symbol (WMW).
Press Release |
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Morningstar Index Team Publications |
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Morningstar Weekly Market Report |
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Concise, in-depth analysis and data on market trends as seen through Morningstar's style, sector, bond, and commodity indexes. These free market commentaries are conveniently delivered to your inbox. Go to http://indexes.morningstar.com and click on "Request Market Commentary" to start your subscription. |
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Morningstar 3rd Quarter Market Commentary |
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Morningstar Speaking at Hansabank Investor Conference |
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Morningstar will be presenting on the topic "How Do You Find the Right Fund?" during the Hansabank Investor Conference Nov. 9 Vilnius, Lithuania |
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Save the DateIbbotson� 2008 Asset Allocation Conference |
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The annual Asset Allocation Conference will be held March 13-14, 2008, in Orlando, Florida. Watch this space for more information. |
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Morningstar at Industry Shows |
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| Morningstar will exhibit at the following conferences. We hope to see you there. |
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Society of Professional Administrators and Record Keepers (SPARK) Nov. 4-6 Palm Beach, FL |
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Morningstar Germany Investment Conference Nov. 6-7 Wiesbaden, Germany |
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TBLI Nov. 15-16, Paris France (Morningstar France) |
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Actionaria Nov. 16-17 Paris, France (Morningstar France) |
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Global Alternative Investment Management (GAIM) USA Jan. 22-24 Boca Raton, FL |
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American Society for Professional Pension Actuaries (ASPPA) 401(k) Sales Summit Feb. 10-12 Orlando, FL |
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Fourth Annual Conference on Managing Retirement Income Feb. 11-13 Miami, FL |
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National Investment Company Service Association (NICSA) 26th Annual Conference and Expo Feb. 17-20 Miami, FL |
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National Association of Variable Annuities (NAVA) Marketing Conference Feb. 24-27 LaQuinta, CA |
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Data Questions |
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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 Questions
Morningstar Europe
1 Oliver's Yard,
55-71 City Road, London EC1Y 1HQ
United Kingdom |
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�2007 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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