Morningstar Announces New Commodity and Sector Fund Categories, One Broad Asset Class
July 06 2009 - 10:00AM
PR Newswire (US)
CHICAGO, July 6 /PRNewswire-FirstCall/ -- Morningstar, Inc.
(NASDAQ: MORN), a leading provider of independent investment
research, today announced it has added six new commodity
categories, four new sector categories, and one broad commodity
asset class to its proprietary classification system for mutual
fund portfolios domiciled in the United States. These new
categories and the asset class are available today. The new
commodity categories are: -- Agriculture: These funds invest in
grain and feed products, oilseeds, cotton, dairy, livestock,
poultry, and/or horticultural products. Investment can be made
directly in physical assets or commodity-linked derivative
instruments. -- Broad Basket: These funds invest in a diversified
basket of commodity goods including but not limited to grains,
minerals, metals, livestock, cotton, oils, sugar, coffee, and
cocoa. Investment can be made directly in physical assets or
commodity-linked derivative instruments, such as commodity swap
agreements. -- Energy: These funds invest in oil (crude, heating
and gas), natural gas, coal, kerosene, diesel fuel, and propane.
Investment can be made directly in physical assets or
commodity-linked derivative instruments. -- Industrial Metals:
These funds invest in such industrial metals as aluminum, copper,
lead, nickel, and zinc. Investment can be made directly in physical
assets or commodity- linked derivative instruments. --
Miscellaneous: These funds invest in a specific commodity that does
not fit into any of Morningstar's existing commodity categories and
for which not enough funds exist to merit the creation of a
separate category. -- Precious Metals: These funds invest in such
precious metals such as gold, silver, platinum, and palladium.
Investment can be made directly in physical assets or
commodity-linked derivative instruments. The new sector categories
are: -- Consumer Discretionary: These funds seek capital
appreciation by investing in equity securities of U.S. or non-U.S.
companies that are engaged in the manufacturing, sales, or
distribution of consumer goods that are non-necessities. --
Consumer Staples: These funds seek capital appreciation by
investing in equity securities of U.S. or non-U.S. companies that
are engaged in the manufacturing, sales, or distribution of
consumer staples. -- Equity Energy: These funds invest primarily in
equity securities of U.S. or non-U.S. companies that conduct
business primarily in energy-related industries. This includes and
is not limited to companies in alternative energy, coal,
exploration, oil and gas services, pipelines, natural gas services,
and refineries. -- Industrials: These funds seek capital
appreciation by investing in equity securities of U.S. or non-U.S.
companies that are engaged in services related to cyclical
industries. This includes, but is not limited to, companies in
aerospace and defense, automotive, chemicals, construction,
environmental services, machinery, paper, and transportation.
Morningstar also added a new broad asset class called "Commodities"
to its current set of six broad asset classes: U.S. Stock,
International Stock, Taxable Bond, Municipal Bond, Balanced, and
Alternatives. All of the new commodities categories are assigned to
this broad asset class. Morningstar has selected the Morningstar
Long-Only Commodity Index as the benchmark for this new broad asset
class. This index has a transparent, rules-based construction with
broad diversification and history back to 1980. "The growing number
of commodity funds and their increased usage prompted us to add
these new categories and the broad asset class so investors can
more properly evaluate and compare funds that invest in
commodities," said John Rekenthaler, vice president of research for
Morningstar. Rekenthaler added, "Our 2008 acquisition Hemscott Data
provided Morningstar with more than 20 years of comprehensive
fundamental data on virtually all publically listed companies in
the United States, Canada, the United Kingdom, and Ireland as well
as a well-established equity sector structure. In order to provide
one comprehensive global sector classification system, we evaluated
both methodologies and combined the best features of each,
resulting in the addition of the new sector categories." As a
result of the new categories, the Morningstar(TM) Rating for funds
that are assigned to a different category may change because they
will now be rated against a new peer group. The new category
assignments will be available in Morningstar's Web-based products
today, and will be rolled out in all Morningstar products by the
end of July. The Morningstar Category(TM) Classifications
methodology is available at
http://corporate.morningstar.com/CategoryClassifications. The
Morningstar Category classifications were introduced in 1996 to
classify funds based on how they actually invest. Rather than
assign a category to a fund based on the objective stated in its
prospectus, Morningstar analyzes the fund's underlying holdings.
Funds are placed in a given category based on their average
portfolio statistics during the past three years. About
Morningstar, Inc. Morningstar, Inc. is a leading provider of
independent investment research in North America, Europe,
Australia, and Asia. The company offers an extensive line of
Internet, software, and print-based products and services for
individuals, financial advisors, and institutions. Morningstar
provides data on more than 300,000 investment offerings, including
stocks, mutual funds, and similar vehicles, along with real-time
global market data on more than 4 million equities, indexes,
futures, options, commodities, and precious metals, in addition to
foreign exchange and Treasury markets. The company has operations
in 19 countries and minority ownership positions in companies based
in three other countries. (C)2009 Morningstar Inc. All rights
reserved. Media Contact: Alexa Auerbach 312-696-6481, DATASOURCE:
Morningstar, Inc. CONTACT: Alexa Auerbach, +1-312-696-6481, Web
Site: http://www.morningstar.com/
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