The Markets May 9, 2011

Morningstar Introduces New Categories for Alternatives

Morningstar, Inc. has added 10 alternative investment categories within the Morningstar Category classification system.
Reported by

The new alternative categories for the broad universe of funds are:

  • Managed Futures: These funds typically take long and short positions in futures or other derivative contracts according to a trend-following or momentum strategy;
  • Multialternative: These funds offer investors exposure to a combination of strategies like long-short equity and debt, managed futures, global macro, and convertible arbitrage, among others. 

The new alternative categories for ETFs are:

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  • Volatility: These funds trade volatility as an asset class and aim to profit from turbulence in the financial markets;
  • Trading—Leveraged Commodities: These funds seek to generate a daily or weekly return that is a certain number of times larger than the return of the reference commodity index;
  • Trading—Inverse Commodities: These funds seek to generate a daily or weekly return that is a certain number of times larger than the reference commodity index but in the inverse, or opposite, direction;
  • Trading—Leveraged Debt: These funds seek to generate a daily or weekly return that is a certain number of times larger than the return of the reference fixed-income index;
  • Trading—Inverse Debt: These funds seek to generate a daily or weekly return that is a certain number of times larger than the reference fixed-income index but in the inverse, or opposite, direction;
  • Trading—Leveraged Equity: These funds seek to generate a daily or weekly return that is a certain number of times larger than the return of the reference equity index;
  • Trading—Inverse Equity: These funds seek to generate a daily or weekly return that is a certain number of times larger than the reference equity index but in the inverse, or opposite, direction;
  • Trading—Miscellaneous: These funds seek to generate a daily or weekly return that is a certain number of times larger than the short-term returns of an index in either a positive or negative direction. 

Funds populating these new categories come primarily from Morningstar’s existing alternative categories, including Long/Short, Market Neutral, Bear Market, and Currency. Funds in the seven trading categories will not receive a Morningstar Rating, because they are primarily designed as short-term holdings.  

The new category assignments are available in Morningstar’s Web-based products now, and Morningstar expects to roll them out in all Morningstar products in the second quarter. 

The Morningstar Category Classifications methodology is available at http://corporate.morningstar.com/CategoryClassifications.

Deals & People May 9, 2011

JH Changes Managers of Three Portfolios

John Hancock Asset Management, a division of Manulife Asset Management, has appointed the U.S. Core Value team to manage three portfolios offered by John Hancock Retirement Plan Services, John Hancock Annuities, and John Hancock Life Insurance.
Reported by

The total encompasses two portfolios in the John Hancock Trust (JHT), which is made up of funds underlying Annuity and Life Insurance products, and one in JHF II, a platform made up of funds in the retail retirement plan channel.   

In JHT, the U.S. Core Value Equity team will manage the Optimized All Cap Trust, which has about $1.23 billion in assets, and the Optimized Value Trust, with approximately $189 million in assets. In JHF II, the team will manage the Optimized Value Fund, with approximately $335 million in assets. 
 
The U.S. Core Value Equity Team is led by Senior Managing Directors Walter T. McCormick and Emory W. (Sandy) Saunders, Jr.
 

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