Products January 13, 2009

Performance Attribution Analysis Added to Morningstar Direct

Morningstar, Inc. has launched its latest version of Morningstar Direct, a Web-based research platform that connects institutional investment professionals to Morningstar's investment research and data.
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According to a press release, the most significant addition to Morningstar Direct is performance attribution analysis, allowing users to quantify and analyze the impact of portfolio decisions, like sector weighting or security selection, on equity performance. Users can perform attribution analysis on their own private portfolios, imported as frequently as daily, in addition to the more than 30,000 actively managed equity investments in the Morningstar database.

Performance attribution analysis examines differences in performance between an actively managed portfolio and a benchmark, and attempts to explain relative under- or over-performance in terms of a managers’ region, sector, style, or market-cap weightings, and security selection, Morningstar said. In Morningstar Direct, users can benchmark performance to another fund, a custom or blended peer group, a Morningstar Category, or a selection from more than 30,000 indexes.

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Performance attribution can be used by asset managers to explain stock selection and weighting decisions. Consultants and institutional investors can use Morningstar Direct’s performance attribution analysis as part of their due diligence research during the investment selection process.

More information is available at www.global.morningstar.com/MorningstarDirect.

Products January 13, 2009

Putnam Releases Absolute Return Suite

Putnam Investments has launched a suite of target absolute return mutual funds designed to seek annualized total returns of 1%, 3%, 5%, or 7% above those of Treasury bills over three years or more.
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A Putnam news release said the new offerings include four funds with specific targets, each geared to meet different investor needs and each investing in a different mix of assets. They include:

  • Putnam Absolute Return 100 Fund—seeks to outperform inflation by 1% as measured by T-bills
  • Putnam Absolute Return 300 Fund—seeks to outperform inflation by 3% as measured by T-bills
  • Putnam Absolute Return 500 Fund—seeks to outperform inflation by 5% as measured by T-bills
  • Putnam Absolute Return 700 Fund—seeks to outperform inflation by 7% as measured by T-bills.

According to the company, the lead manager of Putnam Absolute Return 500 Fund and Putnam Absolute Return 700 Fund is Jeffrey Knight, deputy head of investments and chief investment officer, Global Asset Allocation. The lead manager of Putnam Absolute Return 100 Fund and Putnam Absolute Return 300 Fund is Rob A. Bloemker, Putnam Investments’ deputy head of investments and chief investment officer, Fixed Income.

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The announcement said the funds offer advisers the tools to more precisely customize portfolios and help manage volatility no matter what markets do because the funds are designed to provide positive returns over time, with less volatility than more traditional offerings.

“Investors and financial advisers are hungry for solutions that target positive returns in good markets or bad and offer a way to venture back into investing,” said Putnam Investments President and CEO Robert Reynolds, in the release. “Diversification and commitment to absolute return strategies can be crucial to long-term investment success, and we believe investors will welcome the opportunity to invest in these funds.”

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