The Morningstar Direct team is pleased to announce the new features and enhancements in version 3.16. In this release, you can now search for Strategic Beta products in addition to taking action on new attributes in Asset Allocation, Portfolio Analysis, and Presentation Studio. For your reference, previously released enhancements are also provided. Also, as communicated earlier, you will not be able to access Morningstar Direct 3.16 with Windows XP. Please contact your IT department to move to Window s environment to benefit from the new features. Strategic Beta Analyze a growing class of strategic beta funds that are index funds that make active bets. (View 5 Min Video) Access Strategic Data Points now tagged for Open- End Funds, Exchange Traded Funds, and Index Universes Access the information in Workspace, Performance Reporting, Presentation Studio, and Asset Flows Conduct a search with True/False flags to screen for strategic beta funds Apply Strategic Beta Attribute Group data point to identify funds that pursue specific strategies Apply Strategic Beta Attribute data point to identify the strategy or strategies the fund pursues Learning Center Complimentary learning opportunities to access live sessions, client events, videos, user guides, and more Access the Morningstar Thought Leadership topics, including a library of Strategic Beta information, to learn about Morningstar Research and apply to your workflow Access the Client Track Series to learn how to apply the various product capabilities into your client role. Performance Reporting & Scorecard Streamline your reporting process and screen investments with custom scores Access Strategic Beta data points to search for specific strategic beta products with specific strategies Apply returns based style analysis benchmark to MPT statistic calculations for more meaningful results Easily add investments from a performance report to an existing investment list Take action on the new Scorecard Templates to jump start report creation Returns-based style analysis for manager due diligence to identify specific managers for style consistency Custom heat maps to track performance and risk trends Auto-save Scorecard results to Custom Database for application in Presentation Studio Custom calculation data points to integrate into performance reporting reports up number, down number, upside standard deviation, downside standard deviation, m-squared, organic growth rate 2014 Morningstar, Inc. All rights reserved. 1
Presentation Studio Create professional, custom-branded presentations (View 4 Min Video) Apply multiple tier custom peer group lens to illustrate how investments rank against like strategies on multiple levels Search for charts and tables, now organized by intuitive business logic, to easily build your presentation Identify the underlying holdings intersection of common securities across all funds in your portfolio Apply various color options in correlation table to convey key corresponding correlations Analyze historical portfolio exposure of Net, Long, and Short positions with Stacked Bar chart Applying pagination to illustrate results in multiple pages for performance table Take action on more flexible Start Date options including since inception date, performance start date, manager start date, and the ability to enter your own start date. Benefit from more flexible formatting options applicable to chart X and Y Axis, font size, and legend to customize your illustrations further Take advantage of more flexible plot type line settings, including shaded area, to convey your results more effectively with Rolling Window and Time Series Charts Portfolio Analysis historical and current charts - fundamental time series chart to compare the characteristics of portfolio and the benchmark results, factor exposure chart, to identify the exposure of specific factors relative to its benchmark, Characteristics charts to analyze characteristics by industry and more Assign a calculation benchmark to each investment in the workbook, using more flexible dynamic benchmark options Improved Investment Growth chart to display results as stacked bar or line modes relative to custom or Morningstar peer groups Selecting specific groups or number of stocks and funds to display in pie charts Retrieve custom composition data point from custom database to integrate into pie chart Text threading, font locking, automated columns, and page overflow capability Access to active share and quantitative equity rating data points Integration with Note Manager to display specific information on managers or stocks in your presentation Ability to export underlying data into Microsoft Excel Coming Soon! Markets periodic table to display winners and losers driven by your market index choices. Currently, this feature is only available in Retirement Plan Line-up Search for Strategic Beta products and illustrate how they rank against like strategies on multiple levels 2014 Morningstar, Inc. All rights reserved. 2
Portfolio Analysis Multi-purpose module that houses a web-based tool used to identify impact of investment decisions (Equity Attribution), the ability to identify impact of strategic asset allocation decisions (Total Portfolio Attribution), market research and fundamental analysis to stream real-time data and more. In the 3.16 Release, Equity Attribution and Total Portfolio Attribution are now located in the Portfolio Analysis module in Morningstar Direct. For Equity Attribution, we highly recommend to start using the Portfolio Analysis location where it offers all the same functionality with better user experience. The Equity Attribution location will retire in 2Q 2015. (View 5 Min Video) Access Morningstar research, including the Global Fund Report, ETF Research, and Manager Narratives to interpret content and more Set default benchmark hierarchy to prioritize the order of available benchmarks Access the Market Research tool to gain perspective of market performance while streaming real-time data Access Equity Fundamental Analysis tool to evaluate stock performance while streaming real-time data Create new Total Portfolio Attribution Effects chart in Presentation Studio to identify impact of strategic asset allocation decisions Apply the new Brazil ANBIMA Category selection for Asset Class Setup in Total Portfolio Attribution Multi-level manager segmentation from your dashboard to quickly drill down for in-depth analysis and comparisons of specific managers Quantitative and qualitative data points integrated into the dashboard (including Active Share and custom data points) to analyze your coverage list more effectively. Quantitative Ratings to determine specific stocks for your portfolio Easy access to Morningstar Equity Research for indepth analysis on stocks in your portfolio Market analysis charts to support options analysis, market views, and technical analysis Historical Factor Exposure Chart to view style tilts Historical Grouping Statistics table to deep-dive into characteristic analysis Portfolio Activity Table to display buys, sells, increases, and decreases over specified time period Time & Sales table to view real-time market data Stock Exchange News Service (SENS) to access South African news Ability to set custom calculations and calculation constraints for various data points in Dashboard Conditional formatting to track trends and highlight specific results Presentation Studio Factsheets for ad-hoc/on demand reporting Coming Soon! Ability to assign template level time period settings Ability to apply multiple Manager Research components at the same time 2014 Morningstar, Inc. All rights reserved. 3
Asset Allocation A web-based tool used to identify optimal asset allocation strategies (View 6 Min Video) Create drawdown-analysis reports in Asset Allocation to analyze historical downturns and recoveries for specific asset classes and mixes also available in Presentation Studio Search for an asset mix with the highest Sharpe Ratio along the efficient frontier Annualize performance results using precise compounding methodology Take advantage of the many performance enhancements made in asset-class and case-file setup Apply conditional formatting for correlation charts in Presentation Studio to easily identify results with color among the asset classes Instantly sync settings in Asset Allocation case files with Presentation Studio reports Time-Varying Asset Mix functionality to update allocations to match changing client goals Surplus Optimization to maximize funding level rather than asset only portfolio return Returns-based style analysis to help determine which managers can help implement your strategic asset allocation policy Risk Decomposition to determine how much risk is attributable to each asset class Currency hedging to incorporate exchange rate exposure, using actual currency forward contracts Custom reporting with Presentation Studio to communicate results Ability to share and send multiple files at a time to various users of Morningstar Direct Ability to display multiple frontiers in efficient frontier chart - also available in Presentation Studio Increased performance speed Morningstar Excel API To retrieve and maximize data in Microsoft Excel Easily refresh formulas in specific range, current worksheet, or whole workbook Apply since inception date performance formula Apply new earnings, dividend, and yield data point formulas Specify number of holdings and view holdings in row format View permission controlled private index and funds data Dash codes to help define calculation time periods Data dictionary to identify name and definition of data points supported Annualized day-to-day return calculation now enabled Custom calculation data points now enabled - alpha, beta, and more Ability to access custom portfolios to retrieve data 2014 Morningstar, Inc. All rights reserved. 4
Asset Flows A web-based tool used to get insight on investor trends Access the new Strategic Beta grouping variable to observe asset changes and trends for Strategic Beta products Access the new Brazil Open-End Fund Market to get insight on investor trends India Open-End Fund Market Weekly flows for US open-end funds and ETFs Custom asset flows for specific time periods Additional access to asset flows in Workspace, Performance Reporting, and Presentation Studio Morningstar Data Content Access many qualitative and quantitative data points across all databases Additional Closed-End Fund data points concerning Peer Group Indices, Yields, Dividends, Earnings and Capital Structure data to expand Closed-End Fund Data 20 Year Period Total Return and Category Percentile Ranks for all major databases Unswang NAV and price data point for European OE funds Annual Report data points to disclose monetary fee amounts for different types of expenses and fees for major fund universes SEC CIK (Central Index Key) data point used on the SEC's computer systems to identify US Mutual Fund companies which filed disclosure with the SEC India Risk Level data point for India Open End Funds SFIN (Segregated Fund Identification Number) data point for Indian Insurance Funds database Change made to primary indexes for 6 Chilean Morningstar Categories Additional two new categories for Taiwan Open end funds SITCA Category evestment separate account and hedge fund data now available for entitlement Effective Duration and Super / Primary / Secondary Sector data points for the Bonds universe Revisions to GICS data points according to the results of annual review of the Global Industry Classification Standard (GICS) Group Colombia Stocks as a separate universe from Global Stocks universe Regular cash dividend and special cash dividend data points - in historical terms for Stocks universe Short-position data points - # of Stock Holdings (Short) and # of Bond Holdings (Short) for Fund portfolios Six additional categories for Categoria INVERCO (a local sector data point) for Spain Pension Funds Identifier data point - RTA Code (provided by Registrar and Transfer Agent) - for Indian Funds Group Japan Open-End Categories as a separate universe from the Category/Sector Average universe Change the definition criteria for Taiwan Open-End Funds by using Country Available for Sale (Performance Level) data point 2014 Morningstar, Inc. All rights reserved. 5
Morningstar Research Access Morningstar independent investment research Easily access Global Fund Reports now available for Europe, Middle East, Africa, and Asia Regions Hedge Fund Research Commentary - provided at month-end and mid-month on performance and trends of the HFRU Indexes (compliant to UCITS guidelines) Institutional Equity Research to take action on stock information for your portfolio Analyst Rating Pillar Scores to understand fund s specific strengths and weaknesses Analyst Ratings (forward-looking) to understand fund s ability to outperform its peers over the long term Quantitative Ratings (forward-looking) for stocks to take action for your portfolio Global Fund Report, a comprehensive report on five analytical pillars, designed specifically for advisors and institutional clients Portfolio Management Create custom portfolios Apply Gross Returns to Global Settings for newly created or imported Accounts, Models, and Custom Benchmarks Ability to create currency hedged returns in portfolio management using the combined series function Ability to now include company Website address on the cover page for all portfolio management system reports Management fee effective period for custom portfolios Auto-share scheduled imports of Accounts, Model Portfolios, and Custom Benchmarks with users or user groups Scheduled return series automated import Ability to create a combined series to combine two different investments, and adding or subtracting a constant value Automatically weight a portfolio by Net Assets Share Class Choice of Net or Gross returns for CITs that are included in an Account or Model Support pre- or post- fee performance calculation Additional Tools Custom Database to create custom classifications and data points to apply to various areas of Morningstar Direct Note Manager to document, categorize, and share information with your colleagues Report Portal On-Demand (Add-On Solution) to share customized investment reports across your organization Retirement Plan Reporting to take full control of your plan review book while leveraging Morningstar expertise in financial communication and data collection 2014 Morningstar, Inc. All rights reserved. 6