On the heels of its re-categorization of U.S. funds, Morningstar this month is launching a new foreign funds classification system that the company hopes will aid fund-owners in investment decisions. The move follows a similar move by Lipper in late July to retool its own international classifications.

Morningstar said it made the move to combat the increased specialization in recent years of the foreign-stock mutual fund market. That, coupled with investors' growing tendency to invest in smaller foreign companies, led to a decision that would help the investors understand differences among foreign funds much as they do domestic funds a no-brainer.

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