Morningstar say it offers "timelier, more transparent data for investors". Morningstar has decided to give more prominence to its research and coverage of collective investment trusts, treating them on par with mutual funds and offering investors more timely information.

Collective investment trusts are similar to mutual funds, but are available only in qualified retirement plans like 401(k)s.

More prominence

"Standard industry practice has been to treat collective investment trusts as 'separate accounts,' using gross returns and not to request monthly data from providers," says John Rekenthaler, v.p. of research at Chicago-based Morningstar. "Because these investments are direct competitors with mutual funds in retirement plans, however, we think it's more appropriate to give them more prominence and put them on a level playing field with mutual funds"

Morningstar's of collective investment trusts coverage will include net returns, gross returns, monthly rankings and the Morningstar Ratings that compare them to a peer group of mutual funds.

"Going forward, investors will be able to directly compare the star ratings of a collective investment trust with those of a mutual fund," says Rekenthaler. "We hope not only to provide a more timely, meaningful point of comparison for investors, but also to set a higher reporting standard within the collective investment trust space."

The move follows Morningstar's acquisition of the database division of InvestorForce, which has bumped up its database to include around 650 collective investment trusts.

Other salient data points include risk and return statistics, fees and expenses, manager information, and portfolio holdings. -FWR

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