Morningstar looks into portfolios with X-Ray
Morningstarwill add a further overlay on its style box revealing the ownership and underlying stock holding biases of portfolios.
The new tool, dubbed X-Ray, will be available through Morningstar’s Adviser Workstation this month and work across Australian and international equities with Morningstar looking at introducing the service to fixed interest funds in the new year.
Morningstar Australia chief executive Scott Cooley says the tool can be used across single funds as well as a blend of funds to balance portfolios or even weight them towards a particular style or sector.
The roll out of X-Ray coincides with the visit of Morningstar founder, chair and global chief executive Joe Mansueto who says X-Ray has become the signature piece of software for the group in the US.
“It examines overall asset allocation by asset class and style but also looks through the veil and reports on regional and sector exposure, top stock holdings and fund manager fees,” Mansueto says.
Cooley says X-Ray is aimed at advisers and dealer group researchers but Morningstar has received interest from multi-manager investment groups to use the tool to ensure portfolios are correctly constructed and weighted.
However Mansueto says Morningstar will continue to concentrate on the adviser sector, which is the provider of the single biggest revenue stream for the US business and as a result the pace of rollouts in Australia of products developed overseas will increase.
As a result of this move the style box software launched at the start of this year will be upgraded from the US in early 2004, which is the expected time frame for fixed interest funds to be covered by the tool as well.
Mansueto also says Morningstar will not be moving away from its qualitative element of the managed funds ratings process in Australia even though it is unique out of the 17 countries in which the group operates.
“All our processes have a qualitative element but Australia still remains as the only place where that goes into the ratings process. We are always looking at the process and this includes the use of qualitative research, which is something we are considering in new markets such as China,” he says.
AUTHOR
Jason Spits
Recommended for you
A former financial adviser has been extradited from New Zealand after being alleged to have misappropriated $4.1 million from 13 clients.
Adviser numbers have continued the winning streak for the 2025–26 financial year with the seventh consecutive week in the green, buoyed by a steady flow of new entrants.
Netwealth chief executive Matt Heine has explained the platform is focused on accelerating its share of the affluent advice market as its NPAT reaches $116 million.
ETF provider Global X has appointed five new roles across the business, including a head of technology, as it seeks to scale the business and expand its reach in the Australian market.
