Opening up the Fiduciary Gatekeepers' Research Manager Summit in Boston this morning, Morningstar's director of fund analysis Karen Dolan introduced that firm's new analyst rating system and explained how an asset class that gained 90% over a decade could still translate into a $5 billion loss for investors.

More than 255 advisors, money managers and other investment professionals attended the inaugural conference, designed to provide a time-efficient information gathering event for advisors and money managers. The conference is sponsored by Financial Advisor and Private Wealth magazines.

In her opening remarks, Dolan noted that investors are getting better at selecting mutual funds, but that doesn't always result in better investment outcomes. REITs were the asset class that produced 90% average cumulative gains for investors for the decade ending in December 2009.

So how did they manage to pick a winner and lose so much money? Essentially, because the vast majority of asset flows piling into REITS in that decade occurred in 2006 and 2007, after all the easy money had been made.

Dolan also told attendees that Morningstar has revised the names it plans to use for its new analyst rating system from AAA, AA and A to Gold, Silver and Bronze. She said they made this change after consulting with clients. Whether the change had anything to do with the unfortunate and embarrassing results of several bond-rating firms that use the first few letters of the alphabet was a topic she did not address.

She did say that Morningstar analysts spend a great deal of time examining returns for 12-month and 36-month rolling time periods. For example, when CGM Focus Fund's Ken Heebner is hot, which is often, he is really hot. Examining 36-month rolling time periods for the CGM Focus since its inception, Dolan said that more than 75% of the time it is in the top quartile.

But when Heebner is not hot, he is often quite cold. Looking at his performance over 12-month rolling time periods, she said that more than 35% of the time he is in the bottom quartile. This is something advisors who place clients' assets in the CGM Focus need to explain to clients.

Other speakers included currency expert Axel Merk of the eponymous fund group, Ronen Israel of AQR Capital Mnagement, Bob Murphy of Hatteras Funds and Stan Majcher of Hotchkis & Wiley.

-Evan Simonoff