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Morningstar UK Appointed by Investment Management Association (IMA) to Monitor Investment Funds Classified to IMA Sectors

Morningstar UK, the UK subsidiary of Chicago-based Morningstar, Inc., a leading provider of independent investment research, has been appointed sector monitoring organisation to the Investment Management Association (IMA). The appointment follows a tender process announced by the IMA in November 2010 and is effective from 1st October 2011.

Geoff Balzano, CEO for Morningstar UK comments:

“The collection and analysis of portfolio holdings is at the core of who we are and what we do. For the past 10 years, Morningstar has led the collection and analysis of full fund portfolio holdings across the UK and Europe based on our fundamental belief that investors need transparent and consistent analysis of full portfolio holdings in order to fully understand their investments. Particularly crucial now is the increasing use of derivatives in investment management and the parallel importance of transparency around their use. By working with the IMA, we are helping to ensure that its sector classification system will evolve to capture and reflect the impact of these increasingly important securities.”

Under the terms of the successful bid, Morningstar will review the portfolio holdings it collects on a monthly basis from each fund against the definitional criteria of its IMA sector. Morningstar will also provide alerts to the IMA about funds whose holdings fail to meet sector requirements.

Also within the agreement, Morningstar will work with the IMA to develop rules for monitoring funds that are not suited to long-only portfolio monitoring. This will include the identification of the increasing number of funds using derivatives for investment purposes beyond efficient portfolio management and the development of a recommended disclosure standard for derivatives holdings.