Morningstar Makes Indexes Free for Benchmarking
Members of the project's advisory council say indexes are a top-five data cost, yet factors such as switching costs and brand recognition deter them from changing suppliers.
For indexes included in the project, participants will receive price return, total return, net return, and month-end constituent data for more than 100 of its indexes, covering different sectors, styles and regions.
Morningstar has also created an Advisory Council for the project, comprised of 25 firms, including Ariel Investments, Dodge and Cox, Eaton Vance Management, and Guggenheim Investments.
"Fund investors today are paying substantially lower fees than when we opened our doors more than 30 years ago. One industry cost that's moving in the opposite direction is the fee charged for indexes used to measure and compare relative investment performance. This benchmarking process is extremely important. But only a handful of index providers control the vast majority of the market, and those providers are using their power to dramatically increase fees," says Morningstar chairman and chief executive Joe Mansueto in a statement. "In keeping with Morningstar's mission to help investors reach their financial goals, the Open Indexes Project offers the industry a new path to lowering costs and ultimately reducing fees charged to individual investors."
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