TORONTO, Jan. 28, 2013 /CNW/ - Morningstar, Inc. (NASDAQ: MORN), a
leading provider of independent investment research, today announced
that BlackRock Asset Management Canada Limited (BlackRock Canada), an
indirect, wholly owned subsidiary of BlackRock, Inc., has licensed the
Morningstar Global Long/Flat Commodity Index to serve as the new
benchmark for the iShares Broad Commodity Index Fund. This
exchange-traded fund (ETF) trades on the Toronto Stock Exchange under
the symbol "CBR," and began tracking the Morningstar index on Nov. 30,
2012. The Morningstar Global Long/Flat Commodity Index is a fully
collateralized commodity futures index that uses a momentum rule to
determine if each commodity is held long or the assets are moved to
cash. This is the first investable vehicle listed in Canada to track
the Morningstar Global Long/Flat Commodity Index.
"There are two potential sources of return when investing in commodities
futures—price change and roll yield," Jeff Logan, head of iShares
Product, BlackRock Canada, said. "We selected the Morningstar Global
Long/Flat Commodity Index as the benchmark for our Broad Commodity
Index Fund because of its superior methodology that aims to maximize
both the changes in commodity prices and the potential returns
generated by rolling the future contracts."
For each commodity in the index, Morningstar calculates a "linked" price
series that incorporates both price changes and roll yield (the loss or
gain that results from replacing an expiring contract with one that
matures further in the future). At each monthly rebalancing,
Morningstar evaluates whether changes should be made to the direction
of the individual commodities in the index. The decision to change
direction is based on whether the linked price is above or below its
12-month daily moving average.
"We are pleased that BlackRock Canada has licensed our index for an
exchange-traded product," Sanjay Arya, senior vice president of
Morningstar Indexes, said. "We have seen a tremendous increase in
investor appetite for commodities in recent years given their low
correlation to traditional asset classes and potential hedge against
inflation. The Morningstar Global Long/Flat Commodity Index provides
investors with a transparent benchmark that harnesses the natural
momentum in the commodities futures market."
The Morningstar Global Long/Flat Commodity Index tracks the performance
of the most liquid exchange-listed commodities futures contracts.
Individual commodities are weighted according to the dollar value of
their open interest. Morningstar employs this system to maintain a
diverse exposure across the spectrum of commodities and to reflect the
importance of each commodity in the global economy. The index is
calculated once a day, rebalanced monthly, and reconstituted annually.
All of Morningstar's commodity indexes have a history going back to
1980 and use a transparent, rules-based methodology.
Introduced in 2002, the Morningstar Indexes include a broad range of
traditional beta global equity, fixed income, and commodity indexes
that are also combined to form an asset allocation index series.
Morningstar Indexes also offers a series of active equity indexes that
draw on the equity, fund, and asset allocation research across the
company. Currently, 32 ETFs and one ETN track Morningstar Indexes
globally. For more information about all of Morningstar's indexes,
visit http://indexes.morningstar.com. Morningstar Indexes is part of the Morningstar Investment Management
division.
About Morningstar, Inc.
Morningstar, Inc. is a leading provider of independent investment
research in North America, Europe, Australia, and Asia. The company
offers an extensive line of products and services for individuals,
financial advisors, and institutions. Morningstar provides data on more
than 385,000 investment offerings, including stocks, mutual funds, and
similar vehicles, along with real-time global market data on more than
8 million equities, indexes, futures, options, commodities, and
precious metals, in addition to foreign exchange and Treasury markets.
Morningstar also offers investment management services through its
registered investment advisor subsidiaries and has approximately $195
billion in assets under advisement and management as of Sept. 30, 2012.
The company has operations in 27 countries.
The BlackRock ETF will not be sponsored, endorsed, issued, sold or
promoted by Morningstar, and Morningstar makes no representation
regarding the advisability of investing in it.
SOURCE: Morningstar Research Inc.
