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Kathy Panagopouloskathy.panagopoulos@morningstar.com
You Can't Always Get What You Want -- New Morningstar Tool Helps Investors Find Similar Funds

CHICAGO, Mar 07, 2002 – It's not uncommon for investors to identify a mutual fund that's a perfect fit for their portfolio, only to learn that it's closed to new investors. Or, that it requires a large minimum investment or charges hefty ongoing expenses. Morningstar's newest online tool, which is available free on Morningstar.com, helps investors quickly find and research possible substitutes for such funds.

"Similar Funds is more than a screening or scoring tool," said Mark Wright, director of online tools for Morningstar.com. "It makes full use of our portfolio information resources as well as our performance and fund operations databases to highlight the similarities of funds. Essentially, it helps investors find a suitable fund that doesn't have purchase constraints or undesirable costs or fees."

The Morningstar Similar Funds tool matches one fund to others in its investment category (such as large-cap growth or small-cap value). The scoring is based on comparisons of both portfolio and performance characteristics. The portfolio similarity score compares the attributes of the funds' most recent portfolios, and the performance similarity score reviews monthly returns for the past three years. The two scores are combined to create an overall similarity score on a scale of one to 10, with 10 being the closest possible match. Investors can specify the maximum initial purchase amount and also opt for no-load funds, those open to new investment, and those with lower-than-average expenses.

For example, Janus Worldwide has one of the best long-term records in its category, but it is closed to new investors. By simply typing "JAWWX" into the Enter Ticker box and marking the "open to new investors" box, an investor can quickly find a number of possible substitute funds, including two with similarity scores of more than 9.0. Investors can then conduct further research into which fund or funds would be a better fit by using the Morningstar Fund Compare tool, which provides a thorough, side-by-side assessment of the funds.

To use the Morningstar Similar Funds tool, go to:

About Morningstar
Morningstar, Inc., a global investment research firm, 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.

Morningstar.com is listed among the top investing sites by publications such as The Wall Street JournalBarron'sMoneyWorth, and U.S. News & World Report. Morningstar provides investment information for a number of leading Web sites, including Microsoft MoneyCentral, Quicken.com, America Online, and Yahoo! Finance, and Netscape Personal Finance.

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