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With the explosion in the number of mutual funds over the past decade, the need for informed and objective third-party fund analysis has never been greater. Morningstar, a Chicago-based investment data company known for its star ratings, recently released an updated version of its software product Principia Pro for Mutual Funds. The database suite gives financial professionals - and anyone else sufficiently interested or well-heeled enough to pay $500 a year for monthly updates - mounds of data on more than 10,000 stock, bond, and hybrid funds.
While smaller investors probably don't need such in-depth analysis, investors with extensive fund portfolios will definitely benefit from the updated version of the software. The product has always allowed the sorting of funds by type, returns, expenses, and more than 100 other datapoints. And it continues to offer extensive profile pages for all the different funds. But the new version expands the amount of information available and adds the ability to create custom benchmarks of performance and fundamental data. It also lets users take their portfolio analysis one step further by letting them build their own real or theoretical fund of funds.
"The key new capability, the cornerstone of what the software is all about, is the ability to create multi-asset portfolios," explains Chris Boruff, product manager for Morningstar's stellar product. "The typical investor's portfolio consists of a number of different types of mutual funds. Now, you can combine those investments into a single portfolio and create aggregate statistics on that portfolio."
Given the market's manic behavior over the past several months, investors need to keep a careful watch on all their varied investments. Principia Pro - and its fund-of-funds feature, in particular - is a handy tool for anyone looking to reduce volatility in their portfolio. Then again, at $500 a year, it does create a whole new kind of downside.
Morningstar: www.morningstar.com/.
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