Morningstar to launch pooled funds database

(September 7, 2004) A database grouping Canada’s nearly 900 pooled mutual funds by industry-standard categories is set for launch later this month, Morningstar Canada announced today.

There are 16 pooled fund categories approved by the Canadian Investment Funds Standards Committee (CIFSC), compared to 35 categories in the retail fund arena.

“We can’t have all the same categories because there aren’t enough funds available,” says John Campea, product manager of data services at Morningstar Canada.

Although core investments, such as equity, balanced, income and money market funds are all represented in the new pooled database, the retail universe has many more specialty categories.

For example, there is no pooled equivalent of the retail Canadian Dividend, Canadian Income Trust or Labour Sponsored fund categories. And there only six pooled categories among foreign equity funds, compared to 11 in the retail realm.

In the specialty fund category, only real estate is represented in the pooled universe, while the retail database contains half-a-dozen categories, including financial services, healthcare, precious metals and science and technology.

Campea says Morningstar’s new database — called “Principia for Pooled Funds” and scheduled for launch on September 23 — will be the first of its kind to use the CIFSC pooled categories. “The category definitions are much more robust than what we had,” he says. “They allow for stricter screening and better comparisons of funds with similar investment mandates.”

The new categories will provide separate rankings for funds specializing in purely Canadian portfolios, which in Morningstar’s current pooled funds universe are lumped in with the Canadian Equity category.

About one-quarter of the 893 pooled fund tracked by Morningstar are devoted to Canadian stocks, led by the Canadian Equity category, with 141 funds.

Filed by Doug Watt, Advisor.ca, doug.watt@advisor.rogers.com