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Margaret Kirch Cohenmargaret.cohen@morningstar.com
Morningstar Introduces 'Ownership Zone,' a New Perspective on Style

CHICAGO, Mar 03, 2003 – Morningstar, Inc., a global investment research firm, today introduced the Morningstar® Ownership ZoneSM, a new graphical tool that gives investors a more complete picture of a mutual fund's holdings. Created by the firm's research team, a mutual fund's Ownership Zone is derived by plotting each stock in the fund's portfolio within the proprietary Morningstar® Style BoxSM. The area in which most of the holdings fall is shaded to provide an intuitive representation of the area of the market in which the fund invests. A red dot in the middle of the Ownership Zone represents the weighted average of all the fund's holdings.

"Many investors think they are building well diversified portfolios, but they don't realize that two funds that appear to be similar in style or size may, in fact, hold very different securities with different risk characteristics," said Don Phillips, Morningstar's managing director. "We developed the Ownership Zone to show investors precisely where a fund's holdings fall in the Morningstar Style Box. Each fund will now have its own unique Ownership Zone, which is not confined to one of the nine squares within the grid." 

Introduced in 1992, the Morningstar Style Box is a nine-square grid that provides a graphical representation of the "investment style" of mutual funds, allowing investors to assess a fund based on its holdings, instead of the fund name or an ambiguous categorization. Its vertical axis distinguishes among small-, mid-, and large-capitalization equity holdings, and the horizontal axis separates funds by investment style--value, blend, and growth. 

"Morningstar's new Ownership Zone makes the popular Style Box significantly more useful for building diversified portfolios because it immediately depicts the style differences between two funds in the same box," said Harold Evensky, a certified financial planner and chairman of the Evensky Group. "With the Ownership Zone, I can show my clients a visual representation of what their funds actually own and how another fund may be better suited for their overall portfolios. It's a powerful new tool, and I plan to incorporate it into my practice."

The Morningstar Ownership Zone was first introduced in Morningstar DataLabSM, an online research lab for institutions that provides unprecedented access to Morningstar's holdings-based investment data. Now, it is being launched through Morningstar Advisor WorkstationSM, an integrated suite of online investment planning tools; Morningstar Principia®, one of the most widely used investment research and management software programs; and MorningstarAdvisor.com®, the firm's Web site for financial advisors.

The Morningstar Ownership Zone is part of a series of recent enhancements and additions to the company's proprietary research methodology. Morningstar introduced its new investment Style BoxSM methodology in May 2002, implemented the new Morningstar RatingTM for mutual funds methodology in June, and released the new Morningstar industry sector classifications in September.

About Morningstar, Inc. 
Chicago-based Morningstar, Inc. is a global investment research firm, offering an extensive line of print, software, and Internet-based products and services for individuals, financial advisors, institutions, and the media. The company is a trusted source for investment information, data, and analysis of stocks, mutual funds, exchange-traded funds, closed-end funds, and variable annuity/life subaccounts.

Editor's Note
Please click on the following link to see a graphic depiction of the Morningstar Ownership Zone.  

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