Morningstar Adds Managed Accounts

Advisors who are looking at managed accounts for stocks may want to examine a new offering from Morningstar Investment Services, Managed Portfolios Select Stock Baskets, which leverages the independent research capabilities of the firm’s 95 stock analysts covering over 1,900 securities, and uses Morningstar’s indexes.

Available only through investment advisors, the portfolios consist of “baskets” of stocks based on the Morningstar Indexes but individualized for an investor’s goals and risk tolerances. “Let’s give our clients a canvas to paint a picture of what they want their clients stock exposure to look like,” says Morningstar Investment Services’ President and CIO Art Lutschaunig.

In structuring a portfolio the investor and her advisor would decide on an investment direction. If the choice was large-cap core and mid-cap value stocks, then the choices would come from Morningstar’s large-cap core and mid-cap value indexes. Investors can opt to restrict certain types of investments (e.g. tobacco stocks). Stocks that the client already owns can also be considered so as not to artificially overweight in particular equities or sectors them. The portfolios are also designed so that no holding ever accounts for more than 8% of the total. Advisors can specify how much or little they want the portfolio to track the index.