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Kathy Panagopouloskathy.panagopoulos@morningstar.com
Morningstar.com Introduces Portfolio Allocator Tool to Help Investors Build, Rebalance, and Diversify Portfolios

CHICAGO, Jan 17, 2001 – Morningstar.com, one of the top investment-information sites on the Web, today introduced a new tool to help investors create the best portfolios to match their financial goals. 

The Morningstar.com Portfolio Allocator tool can create a portfolio from scratch or rebalance an existing one based on an investor’s desired objectives. This new application identifies a list of mutual funds that best meet an investor’s target portfolio characteristics.

"Portfolio Allocator is one of the first tools of its kind on the Web," said Catherine Odelbo, president of Morningstar.com. "It simplifies investing so people don’t have to make financial decisions in the dark. Our new tool helps eliminate the guesswork of building well-diversified portfolios."

In four steps, Portfolio Allocator helps an investor determine the best makeup of mutual funds and stocks to build portfolios:

  • Step 1:  Investors choose an existing portfolio they have entered at Morningstar.com or ask Portfolio Allocator to create one.
  • Step 2: Next, investors enter target percentages for three portfolio characteristics: asset allocation (cash, stocks and bonds, etc.), equity investment style (large value, large growth, mid/small value, and mid/small growth), and sector allocation (such as retail, financials, health, or technology). Investors may compare their portfolios to the S&P 500 stock index, choose among three other indexes, or create their own portfolio makeup.
  • Step 3:  Investors determine their target bond investment style by choosing among preferences in two categories: interest-rate risk (low, moderate, or high) and credit quality (from AAA for very high quality to B for low quality).
  • Step 4:  Investors choose the universe of holdings from which to build or rebalance their portfolios. This configuration can be an existing portfolio or a selection of more than 100 mutual funds chosen by Morningstar fund analysts. Also, investors can add specific stocks or funds to be considered in the new portfolios. Finally, if investors are rebalancing an existing portfolio, they may opt to maintain any of its holdings for tax or other reasons. The tool will readjust the portfolio with those positions in the mix.

"Building a solid portfolio is similar to building a house--you’d never try to go it alone," Odelbo said. "With Portfolio Allocator, investors can rely on unbiased information from Morningstar to help them design and build portfolios that help them meet their financial goals."

Morningstar.com offers other enhancement tools in its Portfolio Manager area. The Tracking feature imports portfolios from software programs such as Quicken and Microsoft while also allowing investors to create their own portfolios, which they can easily manage on Morningstar.com. The Portfolio X-Ray SM application breaks down portfolios in eight categories, including asset allocation, style-box diversification, stock type, and top 10 holdings, so investors can better understand what they own and how it compares to the S& P 500 benchmark.

Portfolio Allocator is part of Morningstar Premium Membership service, which is available for $9.95 per month or $99 per year.

Premium members also have access to other portfolio tools such as the Portfolio X-Ray Stock OverlapSM, which reveals overexposure in individual holdings and issues alerts that notify investors when their holdings change. In addition, premium members can use Portfolio DiagnosticsSM, a narrative tool that evaluates individual portfolios in six areas--asset allocation, style-box diversification, stock sector, stock type, world regions, and fees and expenses--with detailed explanations that help investors understand what the data means to them.

About Morningstar, Inc.
Chicago-based Morningstar, Inc. is an independent provider of reliable, unbiased investment information. Morningstar.com is listed among the top investing sites by publications such as The Wall Street Journal, Barron’s, SmartMoney, Money, Worth, and U.S. News & World Report. Morningstar provides investment information for a number of leading Web sites, including Microsoft MoneyCentral, Quicken.com, America Online, Yahoo! Finance, and Netscape Personal Finance.

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