| |
|
|
 |
| What are Morningstar's indexes and ticker symbols?
|
| Based on the same methodology as the well-known Morningstar
Style BoxTM, Morningstar has developed a comprehensive family of 16
indexes targeting 97% of the U.S. equity market. The Morningstar indexes
include a broad market index, three cap indexes, three composite style
indexes, and nine style indexes. |
| |
| What are these indexes designed for? |
|
|
| • |
Portfolio Building Blocks |
| |
Asset Allocation |
| |
Morningstar's indexes enable a thorough assessment
of style-related risk-return tradeoffs in portfolio construction,
as well as precise control and monitoring of portfolio style. |
| |
|
| |
Investment vehicles |
| |
Morningstar indexes were designed to support investment
creation from the beginning. Comprising the best practices in index
construction—broad market representation, investability, and
controlled turnover—the indexes are a sound basis for index funds,
exchange traded funds and derivative products. |
| |
|
| • |
Performance Measures |
| |
Performance Evaluation |
| |
Performance measurement and attribution based on the
indexes provide a powerful means of understanding the factors that
affect portfolio return and risk on an ongoing basis. |
| |
|
| |
Market Monitoring |
| |
The behavior of stocks of different styles can be monitored
on an up-to-the-minute basis using Morningstar's style-based indexes.
Understanding the behavior of different stock types is a crucial input
to decision-making when selecting individual funds for investment
or in constructing a diversified, style-controlled portfolio. |
| |
|
| What is unique about Morningstar's indexes? |
| In addition to it's robust 10-factor methodology, Morningstar's
indexes are unique in several ways: |
| |
| Distinct |
| Diversification depends upon the ability to make clear
investment distinctions. For the purposes of asset allocation and
portfolio assembly, Morningstar's style box methodology was designed
to uniquely classify stocks by style and capitalization. To enable
investors to create non-overlapping and comprehensive portfolios,
our methodology maps each stock to only one of the 9 style boxes.
Many index families use an overlapping index approach where two indexes
contain the same stock. Other families choose to split the market
cap of a single stock between growth and value indexes if their style
is not clear. To Morningstar, this blurring of distinctions makes
asset allocation more difficult. |
| |
| Style Pure |
| Morningstar's holds the view that not all stocks are
growth or value. Where neither growth or value characteristics predominate,
a stock is classified as core. Although a few index families recognize
core or neutral stocks exist, these families exclude them in their
style indexes. Morningstar's family is unique in that it offers the
ability to target investment in companies that generally represent
the mainstream and are often "blue chip" holdings. Also,
because we divide the style universe into core, in addition to growth
and value, the characteristics of the Morningstar's style indexes
are more pure than other style index families. This affords investors
greater possibilities for diversification in asset allocation. |
| |
| Designed for Investability |
| From the beginning, Morningstar's indexes have incorporated
the best practices in index construction. Designed to support portfolio
assembly, they are completely rules-based, free-float weighted, fully
investable, buffered to limit unnecessary turnover, calculated in
real-time, and end-of-day values are available in four currencies.
|
| |
|
|
|
|
