Morningstar, Inc. : Morningstar Australasia Moves to New Global Analyst Rating Scale for Australian and New Zealand Funds

Morningstar Australasia Moves to New Global Analyst Rating Scale for Australian and New Zealand Funds

SYDNEY/AUCKLAND, 31 January 2012 - Morningstar Australasia Pty Limited, a subsidiary of Morningstar, Inc. (NASDAQ: MORN), a leading provider of independent investment research, today announced the migration of its existing Morningstar Recommendation qualitative rating scale for Australian and New Zealand managed funds to the new global Morningstar Analyst RatingTM. The new Analyst Ratings are now available in Morningstar's Australian and New Zealand products and services.

The five-tiered Analyst Rating scale has three positive levels - Gold, Silver, and Bronze - in addition to Neutral and Negative ratings. Analysts arrive at a rating through an evaluation of five key pillars they believe are crucial to predicting the future success of a fund: People, Process, Parent, Performance, and Price. Morningstar analysts score these five pillars as Positive, Neutral, or Negative, which are then combined for the overall rating. Morningstar reserves the top three tiers, expressed as medals, for funds its analyst team thinks have sustainable advantages that position them well relative to peers and/or a relevant benchmark on a risk-adjusted basis over a full market cycle of at least five years.

"Morningstar has been providing analyst research on funds since the late 1980s, but our new rating system represents the first time that we've offered a global qualitative rating for funds," said Morningstar Australasia Chief Executive Officer Anthony Serhan. "Investors and advisers in Australia and New Zealand will benefit from the extensive work we've undertaken globally to identify and codify the strengths of our various fund evaluation methods.

"We now also have three positive designations - Gold, Silver, and Bronze - rather than two positive ratings, as well as a Neutral and Negative rating, providing an additional level of distinction and enabling us to give more granular insights into our views on funds."

The new Morningstar Analyst Rating scale is as follows:
• Positive Ratings:
Gold: a best-of-breed fund that distinguishes itself across the five pillars and has garnered the analysts' highest level of conviction;
Silver: a fund with notable advantages across several, but perhaps not all, of the five pillars - strengths that give the analysts a high level of conviction;
Bronze: a fund with advantages that outweigh any disadvantages across the five pillars, and sufficient level of analyst conviction to warrant a positive rating;
• Neutral: a fund that isn't likely to deliver standout returns, but also isn't likely to significantly underperform; and

• Negative: a fund that has at least one flaw likely to significantly hamper future performance, and is considered an inferior offering to its peers.

Morningstar's fund research in Australia and New Zealand is co-led by Chris Douglas and Tim Murphy. Morningstar does not charge fund managers for the production of ratings or research, and the decision to rate and report on a specific fund is determined by the fund analyst team on the basis of client demand, asset size, and assessment of investment merit.

The new Morningstar Analyst Ratings are available in Australia and New Zealand in Morningstar® Adviser Research CentreTM, a web-based solution developed specifically for dealer groups and financial advisers; Morningstar® Adviser WorkstationTM, a global practice and portfolio management solution for advisers; and Morningstar DirectTM, the company's web-based global investment analysis platform for institutional investors. Analyst Ratings are also available to Australian investors with Premium Membership of the Morningstar.com.au website.

About Morningstar Australasia and Morningstar, Inc.
Morningstar Australasia Pty Limited is an Australian subsidiary of Morningstar, Inc., a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offers an extensive line of products and services for individuals, financial advisers, and institutions. Morningstar provides data on approximately 330,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than five million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its registered investment adviser subsidiaries and had more than US$167.0 billion in assets under advisement and management at 30 September 2011. The company has operations in 26 countries.