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Margaret Kirch Cohenmargaret.cohen@morningstar.com
Morningstar Introduces 'Next Generation' of Investable U.S. Equity Indexes

CHICAGO, Oct 03, 2002 – Morningstar, Inc., a global investment research firm, today introduced its family of 16 investable U.S. equity indexes throughout the company's data and analytical products, including its popular investment Web site, Morningstar.com. The company also launched a new Web site today, http://indexes.Morningstar.com, where investors can track trailing, calendar, and historical index returns and find more detailed information about the new Morningstar Indexes.

In conjunction with the launch of its indexes, Morningstar is introducing a new tool called the Morningstar Market BarometerSM, which graphically depicts the intensity of market moves using varying shades of red and green. Now, investors can understand at a glance what is driving overall market behavior for all market cap and style segments.

"Instead of seeking to replicate active management styles through broad and overlapping benchmarks, it's time for a new generation of style-based indexes that clearly define the investable universe," said Morningstar Managing Director Don Phillips. "Morningstar's new indexes, which were built as an integrated system, identify the fundamental traits of individual securities and their associated performance patterns. Each index represents a unique set of stocks with distinct style and cap orientations that are designed to be used as building blocks for efficient portfolio construction and monitoring."

Calculated in real time, Morningstar Indexes track the U.S. equity market by capitalization and investment style using a comprehensive and nonoverlapping approach based on the proprietary 10-factor Morningstar Style BoxTM methodology. Designed for asset allocation and performance measurement, Morningstar Indexes help investors to thoroughly assess style-related risk/return trade-offs. 

Morningstar's stock classification methodology is stylistically pure and reveals meaningful performance differences between growth and value. Morningstar's indexes were designed to be fully investable and support cost-efficient portfolio management by incorporating the best practices in index construction. Offering broad market coverage targeted at 97 percent of the U.S. equity universe, the indexes are rules-based, free-float weighted, screened for liquidity, buffered to limit unnecessary turnover, rebalanced quarterly, and reconstituted semiannually.

Completely unique among style index providers, Morningstar Indexes include the "core" stock style, in addition to growth and value. When neither growth nor value characteristics predominate, stocks are classified as core. Other index families classify all stocks as either growth or value, or split the market capitalization of a single stock between growth and value, or simply omit neutral stocks entirely from their indexes. Often considered "blue chip" holdings, Morningstar views core stocks as desirable for investing in their own right and worthy of a distinct classification to provide investors more options for asset allocation and diversification. 

Morningstar Indexes and Ticker Symbols:

Index Name                                  Ticker       

Broad Market Index
Morningstar US MarketSM Index    $MSTAR

Cap Indexes
Morningstar Large CapSM Index     $MLCP
Morningstar Mid CapSM Index        $MMCP
Morningstar Small CapSM Index      $MSCP

Composite Style Indexes
Morningstar US GrowthSM Index    $MGRO
Morningstar US CoreSM Index        $MCOR
Morningstar US ValueSM Index       $MVAL

Style Indexes
Morningstar Large GrowthSM Index  $MLGR
Morningstar Mid GrowthSM Index     $MMGR
Morningstar Small GrowthSM Index   $MSGR
Morningstar Large CoreSM Index      $MLCR
Morningstar Mid CoreSM Index         $MMCR
Morningstar Small CoreSM Index       $MSCR
Morningstar Large ValueSM Index     $MLVL
Morningstar Mid ValueSM Index        $MMVL
Morningstar Small ValueSM Index      $MSVL

In addition to Morningstar.com and http://indexes.Morningstar.com, Morningstar Indexes are available at MorningstarAdvisor.comMorningstarDataLab.com; and MorningstarManagedPortfolios.com. They are also available through Morningstar Principia, the company's flagship software product. Morningstar's 10 European Web sites will include index information later this year. 

About Morningstar, Inc. 
Morningstar, Inc. is a global investment research firm that provides financial data, research, online advice, consulting services, and investment solutions for individuals, financial advisors, institutions, and the media worldwide. Morningstar is a trusted source of investment information and analysis for stocks, mutual funds, exchange-traded funds, closed-end funds, and variable annuities. Morningstar tracks nearly 100,000 securities worldwide.

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