Research firm Morningstar Inc. has begun providing its ratings and Global Fund Reports for some 40 alternative U.S. mutual funds, covering an estimated 75% of the alternative fund universe by assets, according to a company release issued Thursday morning at the 2012 Morningstar Investment Conference in Chicago. Over the next year, the company plans to increase its alternatives coverage to approximately 100 funds.
Initially, Morningstar analysts have assigned a "Gold" rating to one alternative mutual fund, a "Silver" rating to nine funds, a "Bronze" rating to seven funds, a "Neutral" rating to 17 funds and a "Negative" rating to six alternative funds. Nadia Papagiannis, director of Morningstar's alternative fund research, said the firm's goal for alternative mutual funds "is to help institutions and financial advisors research and compare funds as they continue to seek diversification through alternative investments."
"The strategies employed in alternative funds are often new and sometimes complex," Papagiannis said in a press release. "Our goal with the Analyst Ratings and Global Fund Reports for these alternative investments is to help institutions and financial advisors research and compare funds as they continue to seek diversification through alternative investments.
"Our recent survey about the perception and usage of alternative investments found that financial advisors and institutions continue to value alternatives," she added. "While inflows to equity-based alternative mutual funds have slowed, investors continue to flock to non-equity-based funds, such as managed futures mutual funds."