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Top Portfolio Products: Morningstar Adds Global Risk Model

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New products and changes introduced over the last week include a global risk model from Morningstar and the merger of Turner Investments with an affiliate of Veracen.

Also, the Defined Contribution Real Estate Council (DCREC) created a checklist for DC plan sponsors considering adding real estate options to their plans, and Waddell & Reed partnered with eMoney Advisor on the latter’s wealth planning solution.

Here are the latest developments of interest to advisors:

1) Morningstar Adds Global Risk Model

Morningstar introduced its first global risk model which includes 36 factors across style, sector, region and currency characteristics to help investors understand the potential risk and return of a stock or an entire portfolio.

The model evaluates more than 40,000 stocks and 10,000 equity fund portfolios in Morningstar’s database and builds a forecast of future returns for various time horizons based on all 36 factor exposures. Factors include  sustainable competitive advantage and ownership data as well as ‘fat tails,’ or extreme events to forecast the future return distribution of individual stocks and equity portfolios.

“Investors can use the risk model to research securities and construct portfolios to make more informed investment decisions about risk and suitability, at a more granular level.” said Warren Miller, head of asset management software for Morningstar, in a press release.

 The company eventually plans to expand the risk model to asset classes in addition to equities and equity funds.

2) Turner Investments to Merge with Veracen Affiliate

Turner Investments, L.P. entered into a merger agreement with an affiliate of Veracen, L.P., and the board of trustees of the Turner Funds approved a new investment advisory agreement between the funds and Turner, subject to shareholder approval and other conditions.

The merger is not conditioned on the approval of the funds’ shareholders. After it’s finalized, Turner Investments, an employee-owned firm founded in 1990 by Robert E. Turner, will continue to manage the funds pursuant to an interim advisory agreement until the receipt of shareholder approval of the new advisory agreement.

3) DCREC Creates Checklist for DC Plan Sponsors

DCREC has created a checklist for use by defined contribution plan sponsors considering adding private real estate as an investment option in DC plans. The checklist  helps  plan sponsors and their partners evaluate private real estate options that can be incorporated into their plan’s overall investment structure.

It includes a range of recommended questions on topics such as daily valuation, liquidity, investment strategy, product structure and investor eligibility, as well as the operational considerations involved in implementing private real estate strategies on existing recordkeeping platforms.

4) Waddell & Reed Partners with eMoney Advisor

Waddell & Reed partnered with eMoney Advisor to provide its advisors with eMoney’s emX Pro wealth planning solution. The solution includes a range of interactive wealth management tools for advisors in support of financial planning needs and business opportunities, and allows them to provide clients with a digital wealth management planning experience.

Read the July 4 Portfolio Products Roundup on ThinkAdvisor.


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