Advisors who invest client funds in Morningstar Managed Portfolios will see some changes starting in the second half of the year.
That’s when Morningstar will begin to replace the assets of Managed Portfolios with Morningstar Funds, whose registration statement with the Securities and Exchange Commission was declared effective on July 11, removing a layer of fees.
Morningstar Funds are offered exclusively to financial advisors and will be subadvised by many of the same investment managers used in Morningstar’s multi-asset Managed Portfolios.
“As more advisors choose to outsource investment management to Morningstar, we are focusing on helping them deliver a lower-cost, personalized, and goal-based experience to investors,” said Kunal Kapoor, Morningstar’s chief executive officer, in a statement.
(Related: Morningstar Prepares to Launch Its Own Funds)
Kapoor said the launch of Morningstar Funds “expands the menu of options for advisors” who work with Morningstar, from using the firm’s data, research and software in their practice to outsourcing investment management.
The nine mutual funds comprising Morningstar Funds consist of three equity funds, four bond funds, one alternative fund and one unconstrained allocation fund.
Expense ratios range from a low of 0.56% for the Morningstar Total Return Bond Fund to a high of 1.01% for Morningstar International Equity Fund, including fee waivers for some funds that run through the end of August 2020.