CHICAGO, June 21, 2011 /PRNewswire/ -- Morningstar, Inc.
(NASDAQ: MORN), a leading provider of independent investment
research, today announced that it has begun to calculate estimated
returns for hedge funds based on publicly available filings. The
company has estimated quarterly returns for approximately 1,700
hedge funds, including some of the largest and most prominent in
the industry.
Although hedge funds do not have to publicly file disclosures,
many entities that hold hedge funds, like registered funds of hedge
funds, do. Morningstar culls information from these funds of funds
using two types of filings to estimate returns—portfolio holdings
disclosures and financial statements. From these filings,
Morningstar collects the beginning market value of an individual
hedge fund holding in a fund of hedge funds and the ending market
value. If the fund of funds did not add or remove cash from the
underlying hedge fund during the period, Morningstar can calculate
an estimated return.
"The vast majority of hedge fund assets are concentrated in a
small number of very large funds, and it's precisely these funds
that are the least likely to report performance," said John Rekenthaler, vice president of research for
Morningstar. "These new estimated returns can provide a unique
window into the performance of popular hedge funds and the entities
that invest in them."
When multiple registered funds of hedge funds hold the same
hedge fund, Morningstar reports the median return as the estimated
performance. Morningstar also lists each individual performance
estimate related to the fund as well as the name of the registered
hedge fund investor. Performance estimates of a fund may vary from
one investor to another due to differences such as fees.
"In contrast to the self-reported composite returns provided to
hedge fund databases or the audited performance numbers in
registered funds' annual reports, estimated performance reflects
the actual experience of specific investors. With estimated
returns, we not only get an overall picture of performance, but we
can see how different investors fared with their investments in the
same hedge fund," Rekenthaler added.
Morningstar has approximately 11,000 hedge funds and funds of
hedge funds in its database. Estimated hedge fund returns are
currently available as a licensed data feed and will be available
in Morningstar Direct(SM), the company's web-based global research
platform for institutional investors, in the coming months. To view
the methodology, please visit
http://global.morningstar.com/EstHFReturn.
This release is not intended to be an offer or solicitation for
the sale of hedge funds. The information is not warranted to be
accurate, complete, or timely. When considering hedge funds,
investors should consider various risks, including the fact that
some products engage in leveraging and other speculative investment
practices that may increase the risk of investment loss, can be
illiquid, are not required to provide periodic pricing or valuation
information to investors, may involve complex tax structures and
delays in distributing important tax information, are not subject
to the same regulatory requirements as mutual funds, often charge
high fees, and in many cases the underlying investments are not
transparent and are known only to the investment manager. The high
degree of leverage that is often obtainable in trading can lead to
large losses as well as gains. Neither Morningstar nor its content
providers are responsible for any damages or losses arising from
any use of this information. Past performance is no guarantee of
future results.
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 approximately 390,000 investment offerings,
including stocks, mutual funds, and similar vehicles, along with
real-time global market data on more than 5 million equities,
indexes, futures, options, commodities, and precious metals, in
addition to foreign exchange and Treasury markets. Morningstar also
offers investment management services and has nearly $140 billion in assets under advisement and
management as of March 31, 2011. The
company has operations in 26 countries.
©2011 Morningstar, Inc. All rights reserved.
MORN-R
Media Contact:
Alexa Auerbach, 312-696-6481 or
alexa.auerbach@morningstar.com
SOURCE Morningstar, Inc.