CHICAGO, July 12, 2018 -- Morningstar Investment Management LLC, a leading provider of discretionary investment management and advisory services, today announced that the registration statement filed by Morningstar Funds Trust for a series of nine open-end mutual funds was declared effective by the Securities and Exchange Commission on July 11, 2018.
During the second half of 2018, Morningstar Investment Management plans to begin converting existing U.S. mutual fund-based Morningstar Managed Portfolios assets to the Morningstar Funds, which will be offered exclusively through fee-based financial advisers offering Managed Portfolios. The Morningstar Funds will not be offered as standalone vehicles.
The third-party active mutual funds currently held in Managed Portfolios will be replaced with the new Morningstar Funds, removing a layer of costs embedded in the current fee structure of the Managed Portfolios. The Funds will be subadvised by many of the same investment managers used in the multi-asset managed portfolios. In many cases, the subadvised structure will give Morningstar Investment Management greater flexibility to express investment ideas and adjust portfolios.
“Offering our own mutual funds through Managed Portfolios extends our long-running partnership with financial advisors. As more advisors choose to outsource investment management to Morningstar, we are focusing on helping them deliver a lower-cost, personalized, and goal-based experience to investors,” said Kunal Kapoor, Morningstar’s chief executive officer. “We share a special bond with advisors in our joint mission of helping investors achieve their financial goals. The launch of these funds expands the menu of options for advisors when they work with us—from using our data, research, and software in their practice to outsourcing investment management, we will continue to serve advisors in ways that they can create successful outcomes for investors.”
The nine mutual funds will consist of the Morningstar U.S. Equity Fund, Morningstar International Equity Fund, Morningstar Global Income Fund, Morningstar Total Return Bond Fund, Morningstar Multisector Bond Fund, Morningstar Defensive Bond Fund, Morningstar Municipal Bond Fund, Morningstar Unconstrained Allocation Fund, and Morningstar Alternatives Fund.
“Minimizing cost while selecting high-quality fund managers was the key driver in our decision to design and launch our own mutual funds for use in our Managed Portfolios offering,” said Daniel Needham, Morningstar Investment Management’s president and chief investment officer. “Having our own fund lineup simplifies the offering for advisors and investors and provides greater flexibility to implement changes in the portfolios and express investment views in an effort to deliver better outcomes for the end investors.”
Each fund is structured as an open-end mutual fund with distinct objectives and strategies. Morningstar Funds may invest in securities of other investment companies (e.g., ETFs) but will invest primarily through subadvisers who actively manage well-defined mandates for each fund. The managed portfolios’ performance will still be driven largely by the underlying subadvisers’ security selection and Morningstar Investment Management’s asset allocation decisions.
The Morningstar Funds will not receive a Morningstar Analyst Rating™, which is an analyst-assigned qualitative rating, or a Morningstar Quantitative Rating™, which is a forward-looking, algorithmically-assigned rating that is analogous to the rating a Morningstar analyst might assign to a fund if an analyst covered that fund. Once a fund has a three-year performance track record, it will be eligible to receive the Morningstar Rating™ or star rating, a quantitative measure that is based on a fund’s trailing risk-adjusted returns versus category peers.
The Morningstar Funds website is available here.
Please consider the investment objectives, risks, and charges and expenses of the Funds carefully before investing. The prospectus contains this and other important information about the Funds. A prospectus is available at http://connect.rightprospectus.com/Morningstar
or by contacting Morningstar Investment Management LLC at 22 W. Washington Street, Chicago, IL 60602 +1 (877) 626-3224. Before investing please read the Morningstar Funds Trust prospectus carefully. Mutual fund investing involves risk. The value of a Fund investment may go down. Morningstar Funds Trust uses a multimanager approach; therefore, in addition to market fluctuations, a Fund’s performance is derived from the skills of the subadvisers and the allocation of assets among them. Diversification does not eliminate the risk of loss in a declining market nor does it assure a profit. Past performance is not a guarantee of future results. The Funds within the Morningstar Funds Trust are distributed by Foreside Fund Services, LLC and are only available to citizens or legal residents of the United States or its territories through Morningstar Managed Portfolios advisory service.
About Morningstar Investment Management LLC
Morningstar’s Investment Management group is a leading provider of discretionary investment management and advisory services. Guided by seven investment principles, the group is committed to focusing on its mission to design portfolios that help investors reach their financial goals. The group’s global investment management team works as one to apply its disciplined investment process to all strategies and portfolios, bringing together core capabilities in asset allocation, investment selection, and portfolio construction. This robust process integrates proprietary research and leading investment techniques. As of March 31, 2018, Morningstar’s Investment Management group was responsible for $201 billion* in assets under advisement and management across North America, EMEA, and Asia-Pacific.
In addition to advisory services, the group’s investment professionals build and manage model portfolios for financial advisors in the United States, United Kingdom, Australia and South Africa to create strategies that incorporate a wide variety of investment objectives.
*Includes assets under management and advisement for Morningstar Investment Management LLC, Morningstar Investment Services LLC, Morningstar Investment Management Europe Ltd., Morningstar Investment Management Australia Ltd., Ibbotson Associates Japan, Inc., and Morningstar Investment Management South Africa (PTY) LTD all of which are subsidiaries of Morningstar, Inc. Advisory services listed are provided by one or more of these entities, which are authorized in the appropriate jurisdiction to provide such services.
About Morningstar, Inc.
Morningstar, Inc. is 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 individual investors, financial advisors, asset managers, retirement plan providers and sponsors, and institutional investors in the private capital markets. Morningstar provides data and research insights on a wide range of investment offerings, including managed investment products, publicly listed companies, private capital markets, and real-time global market data. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than $201 billion in assets under advisement and management as of March 31, 2018. The company has operations in 27 countries.
This press release is for informational purposes only; references to securities should not be considered an offer or solicitation to buy or sell the securities.
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