Morningstar Announces New Classification Structure for Global Equities

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Oct 05, 2010, 10:55 ET

CHICAGO, Oct. 5 /PRNewswire-FirstCall/ -- Morningstar, Inc. (Nasdaq: MORN), a leading provider of independent investment research, today announced it has revised its classification structure for global equities based on the market a company serves rather than the type of business it conducts. In general, the new classification structure will have fewer Industries and Industry Groups and redefined Sectors and Super Sectors.

Under the new global equity classification structure, Morningstar first maps companies into one of 148 Industries, based on their largest sources of revenue and income. The Industries roll up into 69 Industry Groups based on their market characteristics. Industry Groups fold into one of 11 Sectors, including Basic Materials, Communication Services, Consumer Cyclical, Consumer Defensive, Energy, Financial Services, Health Care, Industrials, Real Estate, Technology, and Utilities. The Sectors finally roll up to one of three major economic spheres, or Super Sectors, which are Cyclical, Defensive, and Sensitive. The Super Sectors indicate the degree to which macro-economic cycles affect sector groups. Click here for a diagram of the new classification structure.

"The overarching structure of our original sector classification system was created nearly 10 years ago, and since that time the markets and our clients' needs have evolved," John Rekenthaler, vice president of research, said. "We developed the new system in conjunction with Morningstar's Equity Research team to better reflect the sensitivity of a company's operations to economic cycles. This is a more intuitive approach that can accommodate the global equity markets and help investors make better-informed investing decisions."

Morningstar will roll out the new classification structure in phases. All products will adopt the new Industry categories on Oct. 15, 2010. Morningstar's Equity Research, Equity Data Feeds, and Equity Indexes groups will also roll out the new Industry Group, Sector, and Super Sector categories in October. All other product groups will follow with the adoption of the Industry Group, Sector, and Super Sector categories toward the end of the first quarter of 2011.

The new Morningstar Category™ Global Equity Classification Structure methodology is available at http://corporate.morningstar.com/EquityClassifications.

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 Internet, software, and print-based products and services for individuals, financial advisors, and institutions. Morningstar provides data on approximately 360,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 4 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. The company has operations in 21 countries.