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Morningstar Direct Gets an Upgrade

Date: Monday, July 31, 2006
Author: Chris Clair, Senior Financial Correspondent, Hedgeworld.com

CHICAGO (HedgeWorld.com)—Morningstar Inc. of late has continued to ramp up its push into the hedge fund sphere, last week announcing that its Morningstar Direct platform now includes information on equity holdings for 600 of the largest hedge fund firms and hedge fund research reports by Morningstar analysts.

This followed news in mid-July that Morningstar had agreed to buy InvestorForce Inc.'s institutional hedge fund and separate account database division for $10 million Previous HedgeWorld Story. Then, at its annual mutual fund conference in Chicago in June, Morningstar announced it would be including hedge fund data in its institutional and individual research platforms Previous HedgeWorld Story.

The important news from the Morningstar Direct announcement last week, for followers of hedge funds, anyway, was the inclusion of the holdings information. These company-wide equity holdings will be compiled by Morningstar using U.S. Securities and Exchange Commission 13-F filings, which are quarterly reports of securities holdings filed by institutional investors. Although they don't provide the most up-to-date snapshots, given their quarterly nature, they can be used to track investing trends.

According to Morningstar, inclusion of this information on the Morningstar Direct platform will give users "insight into the investment strategies of many of the most prominent hedge fund firms."

Other enhancements to the Morningstar Direct platform are a new database of stocks and American Depository Receipts that includes daily trailing returns, valuations, financial statements and Morningstar recommendations and ratings; a global ownership database; and an expanded European mutual fund database.

Morningstar hopes that all this new information, coupled with hedge fund holding and research reports, will push the firm's name and products deeper into the growing hedge fund space. "Our goal with Morningstar Direct is to create a comprehensive investment research platform," said Joe Mansueto, chairman and chief executive of Morningstar, in a statement. "The addition of securities data, expanded European mutual fund statistics, and hedge fund research reports rounds out our offering to include all major investment categories."