Morningstar Introduces StockInvestor Core Index Based on Tortoise and Hare Strategies (PYH)
Morningstar, Inc. (Nasdaq: MORN), a leading provider of independent investment research, has created the Morningstar StockInvestor Core Index, a diversified portfolio of stocks from the Tortoise and Hare portfolios(1) featured in the popular Morningstar® StockInvestor™ newsletter, edited by Morningstar Equities Strategist Paul Larson. The Tortoise and Hare portfolios comprise high-quality companies that are trading at sharp discounts to what Morningstar’s equity research analysts believe they’re worth. Invesco PowerShares Capital Management LLC, a leading global provider of exchange-traded funds (ETFs), has licensed the StockInvestor Core Index to serve as the new benchmark for the PowerShares Value Line Industry Rotation Portfolio ETF. The ETF has been renamed the PowerShares Morningstar StockInvestor Core Portfolio(2) to reflect the benchmark change, and trades on the New York Stock Exchange under the symbol “PYH.”
“The new StockInvestor Core Index harnesses the proprietary research and analyst expertise of Morningstar’s equity research team,” said Sanjay Arya, director of Morningstar Indexes. “This index spotlights Morningstar’s disciplined approach to investing and stock picking, using fundamental analysis and the Morningstar Economic Moat™ Rating to determine whether a company’s stock price is fairly valued.”
The StockInvestor Core Index holds almost all of the stocks from the Tortoise and Hare portfolios. These portfolios focus on stocks of relatively stable, high-quality businesses that are well entrenched in the various markets in which they operate. Companies in the Tortoise and Hare portfolios span an array of industries and numerous geographic locales. When coming up with the ratings critical in selecting stocks for the portfolios, Morningstar’s equity analysts conduct extensive research on industry dynamics, competitive positions, and the sustainability of any advantages that the businesses have.
“I have long advocated using the economic-moat concept in the investment process,” said Pat Dorsey, director of equity research for Morningstar. “Paul Larson, in conjunction with Morningstar’s approximately 100 research analysts, has successfully implemented this investment strategy in the Tortoise and Hare model portfolios whereby analysis and emphasis is placed on evaluating a company’s competitive advantage to determine both a company’s financial prospects and business risk.”
To be eligible for inclusion in the StockInvestor Core Index, a stock must have $100 million in market capitalization, a Morningstar Economic Moat™ Rating of Narrow or Wide, and a Morningstar Rating™ for stocks of at least 4 stars. The Morningstar StockInvestor Core Index will use the ticker symbol “MSIC.” Index values are calculated and disseminated in real time.
Introduced in 2002, the Morningstar Indexes family includes a broad range of global equity, fixed income, and commodity indexes that are also combined to form an asset allocation index series. Currently, 10 ETFs and 1 ETN track Morningstar Indexes. For more information about all of Morningstar’s indexes, visit http://indexes.morningstar.com.
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 Internet, software, and print-based products and services for individuals, financial advisors, and institutions. Morningstar provides data on approximately 350,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 4 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. The company has operations in 20 countries and minority ownership positions in companies based in two other countries.
(1) Neither the Tortoise or Hare portfolio are themselves an investable product. The Tortoise and Hare portfolios are provided to subscribers of the Morningstar StockInvestor newsletter for informational and research purposes only.
(2) The PowerShares Morningstar StockInvestor Core Portfolio ETF is not sponsored, endorsed, sold or promoted by Morningstar, and Morningstar makes no representation regarding the advisability of investing in it.
Caution Concerning Forward-Looking Statements
This press release contains forward-looking statements as that term is used in the Private Securities Litigation Reform Act of 1995. These statements are based on our current expectations about future events or future financial performance. Forward-looking statements by their nature address matters that are, to different degrees, uncertain, and often contain words such as “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” or “continue.” These statements involve known and unknown risks and uncertainties that may cause the events we discussed not to occur or to differ significantly from what we expected. For us, these risks and uncertainties include, among others, general industry conditions and competition, including current global financial uncertainty; the impact of market volatility on revenue from asset-based fees; damage to our reputation resulting from claims made about possible conflicts of interest; liability for any losses that result from an actual or claimed breach of our fiduciary duties; financial services industry consolidation; a prolonged outage of our database and network facilities; challenges faced by our non-U.S. operations; and the availability of free or low-cost investment information. A more complete description of these risks and uncertainties can be found in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2009. If any of these risks and uncertainties materialize, our actual future results may vary significantly from what we expected. We do not undertake to update our forward-looking statements as a result of new information or future events.
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