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Morningstar Investment Services Adds Innovative Active/Passive, Momentum, and Global Tactical Allocation Strategies to its Morningstar Managed Portfolios Program


CHICAGO — Morningstar Investment Services, Inc., (MIS) today introduced a suite of new strategies to Morningstar Managed Portfolios, a fee-based discretionary investment management program offered exclusively through financial advisors. The strategies, which include active/passive, momentum ETF, and global tactical ETF portfolios, tap innovative methodologies developed by Ibbotson Associates, a world leader in asset allocation. MIS and Ibbotson are registered investment advisors within Morningstar’s Investment Management division.

“We’re thrilled to make the Ibbotson portfolios available to the more than 30,000 independent financial advisors who have access to the Morningstar Managed Portfolios platform,” said Jeffrey Ptak, president and chief investment officer of MIS. “Advisors have increasingly sought low-cost, active investing solutions that employ exchange-traded funds. We think they’ll find plenty to like in the Ibbotson portfolios, which further broaden our lineup while putting Ibbotson’s institutional capabilities within their clients’ reach.”

Ibbotson Active/Passive Portfolios
Some asset classes, like small-cap and emerging markets equities, can present better opportunities for active managers than others, such as government bonds and large-cap equities. The five Ibbotson Active/Passive Portfolios use ETFs or indexed mutual funds in areas that are less ripe for active managers, and actively managed funds in realms where a talented portfolio manager is more likely to add value after taking risk into account. Broadly diversified and low cost, these portfolios are designed to bring investors the strength of both approaches

Ibbotson Momentum ETF Portfolios
Momentum investing is a well-documented investing style that takes advantage of trends in investment returns. The five Momentum ETF Portfolios seek to exploit these patterns by systematically under- or over-weighting asset classes based on proprietary momentum signals developed by Ibbotson. The portfolios confer the benefits of low-cost, broadly diversified investing, but also rapidly adjust to evolving market conditions.

Ibbotson Global Tactical ETF Portfolio
While momentum explains some of an asset class’ return pattern over shorter time periods, over longer time spans returns tend to revert to their historical averages, or means. This implies that investors could benefit from buying what’s out of favor and selling what’s in vogue over the long term, while following trends in the short term. The Ibbotson Global Tactical ETF Portfolio combines momentum and “mean-reversion” signals to tactically allocate among asset classes. The unconstrained portfolio is not tied to a target allocation, but invests in areas of the market identified by Ibbotson’s proprietary tactical methodology. The Global Tactical ETF Portfolio is geared toward investors seeking a highly dynamic, opportunistic approach.

“These new portfolios leverage the best ideas and latest research from across Morningstar’s Investment Management division,” said Thomas Idzorek, chief investment officer and research director for the Morningstar Investment Management division. “All three new strategies start with robust Ibbotson asset allocations and then attempt to add additional value through active-risk budgeting or tactical modeling to exploit the momentum anomaly or momentum and mean reversion patterns.”

Additional information about Morningstar Managed Portfolios is available at:

About Morningstar Investment Services
Morningstar Investment Services, Inc. is a registered investment advisor and a wholly owned subsidiary of Morningstar, Inc. (NASDAQ: MORN). MIS offers Morningstar Managed Portfolios, a turnkey, fee-based discretionary investment management program developed for financial advisors and their clients who are citizens or legal residents of the United States or its territories. MIS, along with Morningstar’s other investment advisory subsidiaries, comprise the Morningstar Investment Management division. This division provides independent investment management and consulting services to institutions and advisors and has approximately $180 billion in assets under advisement and management as of June 30, 2011. For more information about Morningstar Investment Services, please visit:

About Ibbotson Associates
Ibbotson Associates, Inc. is a registered investment advisor within the Morningstar Investment Management division and a wholly owned subsidiary of Morningstar, Inc. This division provides independent investment management and consulting services to institutions and advisors.


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