Managed products need more transparency

Author: Zoe Thomas | Published: 2 Sep 2015

Securities research firm Morningstar is proposing that all managed products sold to investors should have increased and equivalent disclosure standards.

The push comes as the Securities and Exchange Commission (SEC) attempts to introduce increased disclosure for mutual funds. In a comment letter sent to the regulator, Morningstar expressed its support for adding transparency and comparability to the mutual fund market by changing the ways securities are labelled, and creating standard metrics for calculating common investor considerations like duration.

In an effort to ensure investors and analysts have all the relevant information, Morningstar’s director of policy research, Scott Cooley, said these standards should also be applied to other collective investment products.

"There should be a level playing field across collective products," said Cooley. "You can have substantially similar product – like an investment trust that is similar to a mutual fund – and it’s odd...