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Portfolio > Mutual Funds

Morningstar To Rate Separate Account Performance, Flexibility

By Staff Writer

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NU Online News Service, Oct. 30, 2003, 11:04 a.m. EST – Morningstar Inc., Chicago, will be rating the performance and flexibility of separate accounts.

A separate account is a large, diversified bundle of investments that resembles an individualized mutual fund. Some investors have been turning to separate accounts in recent years to avoid the tax headaches associated with conventional mutual funds.

Morningstar will be giving separate accounts the same kinds of “star ratings” for risk and performance that it gives mutual funds. To qualify for a rating, a separate account must be at least three years old.

The new flexibility rating will be an indicator of the level of customization that each separate account offers, Morningstar says. Morningstar will base the flexibility rating on a survey that will determine availability of 18 types of special services.

Morningstar is including the separate account ratings with Morningstar DataLab, a research software product designed for investment advisors.

Morningstar also plans to offer the separate account ratings through the Morningstar Principia Separate Accounts Morningstar Advisor Workstation programs.

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