Morningstar has added global real estate and currencies as two new categories it will track for mutual funds, and alternative investments as a new broad asset classes.

Global real estate will include debt and equity securities, convertible securities and securities issued by Real Estate Investment Trusts. There are currently 45 mutual funds and 11 exchange-traded real estate funds with at least 40% of their holdings in non-U.S. holdings.


Currency funds invest in U.S. and foreign currencies through cash deposits, short-term money market instruments, and derivative instruments, such as forward currency contracts, index swaps and options. There are currently eight mutual funds and 26 ETFs in this category.


The alternative category will cover five asset classes: U.S. equity, international equity, taxable bond, municipal bond and balanced. Morningstar is classifying alternative securities to include: currencies, long-short, precious metals and bear market funds.


“We’ve made these adjustments so investors can more properly identify and evaluate real estate and currency funds,” said John Rekenthaler, vice president of research for Morningstar. “Funds that are now a part of the global real estate category were formerly included in the specialty-real estate category, under the U.S. stock asset class.”


In addition, Rekenthaler continued, “The number of currency funds is growing rapidly, especially among exchange-traded funds. The additional of an alternative asset class is a more appropriate classification for currency funds, as well as long-short, precious metals, and bear market funds.”

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