BlackRock Canada Licenses Morningstar Global Long/Flat Commodity Index for ETF
TORONTO, Jan. 28, 2013 /CNW/ - Morningstar, Inc. (NASDAQ: MORN), a leading
provider of independent investment research, today announced that BlackRock
Asset Management Canada Limited (BlackRock Canada), an indirect, wholly owned
subsidiary of BlackRock, Inc., has licensed the Morningstar Global Long/Flat
Commodity Index to serve as the new benchmark for the iShares Broad Commodity
Index Fund. This exchange-traded fund (ETF) trades on the Toronto Stock
Exchange under the symbol "CBR," and began tracking the Morningstar index on
Nov. 30, 2012. The Morningstar Global Long/Flat Commodity Index is a fully
collateralized commodity futures index that uses a momentum rule to determine
if each commodity is held long or the assets are moved to cash. This is the
first investable vehicle listed in Canada to track the Morningstar Global
Long/Flat Commodity Index.
"There are two potential sources of return when investing in commodities
futures—price change and roll yield," Jeff Logan, head of iShares Product,
BlackRock Canada, said. "We selected the Morningstar Global Long/Flat
Commodity Index as the benchmark for our Broad Commodity Index Fund because of
its superior methodology that aims to maximize both the changes in commodity
prices and the potential returns generated by rolling the future contracts."
For each commodity in the index, Morningstar calculates a "linked" price
series that incorporates both price changes and roll yield (the loss or gain
that results from replacing an expiring contract with one that matures further
in the future). At each monthly rebalancing, Morningstar evaluates whether
changes should be made to the direction of the individual commodities in the
index. The decision to change direction is based on whether the linked price
is above or below its 12-month daily moving average.
"We are pleased that BlackRock Canada has licensed our index for an
exchange-traded product," Sanjay Arya, senior vice president of Morningstar
Indexes, said. "We have seen a tremendous increase in investor appetite for
commodities in recent years given their low correlation to traditional asset
classes and potential hedge against inflation. The Morningstar Global
Long/Flat Commodity Index provides investors with a transparent benchmark that
harnesses the natural momentum in the commodities futures market."
The Morningstar Global Long/Flat Commodity Index tracks the performance of the
most liquid exchange-listed commodities futures contracts. Individual
commodities are weighted according to the dollar value of their open interest.
Morningstar employs this system to maintain a diverse exposure across the
spectrum of commodities and to reflect the importance of each commodity in the
global economy. The index is calculated once a day, rebalanced monthly, and
reconstituted annually. All of Morningstar's commodity indexes have a history
going back to 1980 and use a transparent, rules-based methodology.
Introduced in 2002, the Morningstar Indexes include a broad range of
traditional beta global equity, fixed income, and commodity indexes that are
also combined to form an asset allocation index series. Morningstar Indexes
also offers a series of active equity indexes that draw on the equity, fund,
and asset allocation research across the company. Currently, 32 ETFs and one
ETN track Morningstar Indexes globally. For more information about all of
Morningstar's indexes, visit http://indexes.morningstar.com. Morningstar
Indexes is part of the Morningstar Investment Management division.
About Morningstar, Inc.
Morningstar, Inc. is a leading provider of independent investment research in
North America, Europe, Australia, and Asia. The company offers an extensive
line of products and services for individuals, financial advisors, and
institutions. Morningstar provides data on more than 385,000 investment
offerings, including stocks, mutual funds, and similar vehicles, along with
real-time global market data on more than 8 million equities, indexes,
futures, options, commodities, and precious metals, in addition to foreign
exchange and Treasury markets. Morningstar also offers investment management
services through its registered investment advisor subsidiaries and has
approximately $195 billion in assets under advisement and management as of
Sept. 30, 2012. The company has operations in 27 countries.
The BlackRock ETF will not be sponsored, endorsed, issued, sold or promoted by
Morningstar, and Morningstar makes no representation regarding the
advisability of investing in it.
Jaime Aitken, 416-484-7868 firstname.lastname@example.org
SOURCE: Morningstar Research Inc.
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-0- Jan/28/2013 18:00 GMT
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