Security - Check Permissions

MFDF - Mutual Fund Directors Forum - Morningstar Change in Fee Methodology to Affect Liquid Alts

Member Login



Request an account

Sample Banner 1

Morningstar Change in Fee Methodology to Affect Liquid Alts

An article on Morningstar.com explains a change in fee methodology spurred by recent FINRA guidance that may cause certain funds to appear more expensive. The new methodology includes in those funds’ annual report and prospectus net expense ratios the costs associated with interest expense and dividends on borrowed securities. The change will affect mostly alternative strategies that use shorting as a regular part of their process, some bond funds and equity funds, according to the article. The change will not affect a fund’s Morningstar Analyst Ratings. The recent guidance from FINRA states that the expense ratios Morningstar publishes must match fund disclosure documents.