Performance Attribution Analysis Added to Morningstar Direct

According to a press release, the most significant addition to Morningstar Direct is performance attribution analysis, allowing users to quantify and analyze the impact of portfolio decisions, like sector weighting or security selection, on equity performance. Users can perform attribution analysis on their own private portfolios, imported as frequently as daily, in addition to the more than 30,000 actively managed equity investments in the Morningstar database.

Performance attribution analysis examines differences in performance between an actively managed portfolio and a benchmark, and attempts to explain relative under- or over-performance in terms of a managers’ region, sector, style, or market-cap weightings, and security selection, the announcement said. In Morningstar Direct, users can benchmark performance to another fund, a custom or blended peer group, a Morningstar Category, or a selection from more than 30,000 indexes.

Performance attribution can be used by asset managers to explain stock selection and weighting decisions. Consultants and institutional investors can use Morningstar Direct’s performance attribution analysis as part of their due diligence research during the investment selection process.

More information can be found at www.global.morningstar.com/MorningstarDirect .