6 Ways to Better Utilize Morningstar and Lipper Data

For many people in the fund industry, market data is an essential lifeline to the facts and figures they need to do their jobs.  Market data is quickly becoming more accurate, more timely and ultimately, more useful, so it’s no surprise that more and more people are relying on it.
Many of the advisors, asset allocators, wealth managers and platforms that rely on market data use Morningstar and Lipper data.  These two suppliers have long been established as the premier “market data” providers in the asset management industry. Their data and instrument coverage is vast and the resources and experience they draw upon to produce accurate fund/security data are immense.

Kurtosys consumes data from Lipper and Morningstar too.  Through our data partnerships with both firms, we’re able to source comprehensive market data on over 250,000 mutual funds, ETFs, pension funds, pooled funds and alternatives. Additionally, we capture many thousands of categories and indexes.

What value can we add to market data?

1. We provide direct access to market data

As we work directly with asset managers we can help them “plumb” straight into Morningstar and Lipper (as long as they have the relevant licenses of course!).  We give them a fast and reliable way to access the data they need to power their documents, digital marketing or internal reporting.

2. We’re a reliable plumber (and our costs are fair too!)

Plumbing in to Morningstar and Lipper data is no trivial job. That’s why Kurtosys has spent a great deal of time and money making sure we can load this data efficiently and make it readily available with context and meaning. With over 3,000 different properties associated with every fund, the explosion of data can be frightening and very costly for asset managers to maintain on their own!

3. We help you comingle market data with in-house reporting

Kurtosys also helps clients comingle market data with their own in-house data.  This lets them produce an array of branded, customized documents and digital solutions for their marketing departments.

4. We plan to complete the circle

Very soon we will begin sending data “back” to these market vendors making Kurtosys part of the aggregation and cleansing ecosystem that ensures the world gets accurate fund data that has been clinically approved by asset managers.

How can you use market data to make your business more efficient?

But what about you? How can asset managers start using market data to work more efficiently? There is so much an asset manager can do to make their internal processes more efficient that it’s difficult to know where to start but here are six basic uses of fund market data that could get you thinking about the many opportunities that exist:

1. Performance Data

6 Ways to Better Utilize Morningstar and Lipper Data 1Most people think fund performance is horrifically complex. In fact, the basic concept of performance is simple – it’s the percentage return of the security over a stated period.

Admittedly, dividends, currencies, weightings, business day count, tax and other factors complicate matters. Over time these issues have become more and more mechanized and market data vendors have many different calculation methods, all of which they share in their data feeds.

The time has come for managers to sanitize these figures and validate them against their own in-house numbers. They won’t be far apart.

2. Static Data

6 Ways to Better Utilize Morningstar and Lipper Data 2Nearly every asset manager has a “spreadsheet” to manage the key bits of standing data such as: Fund manager details, codes, service provide details, contact address, etc.

If you distribute and maintain this data with the market data vendors there is no longer any need for your spreadsheet, you can simply use the market data feeds for your own purposes. Just make sure the information you need is available for you to download in Excel so you can use it in a practical way and if you need help making that happen, just give us a call at Kurtosys.

3. Sectors and Benchmarks

6 Ways to Better Utilize Morningstar and Lipper Data 3Ask a marketing director how they define “sectors.” You may see the odd blush. Many asset managers we talk to are using sector definitions that they are unsure of, and the exact make-up or underlying constituent list of the sector they are referencing is unknown.

Some of the sector definitions they use have exclusions (or, in fact, inclusions) that have been hard coded long ago in the distant past. No one can quite remember why those definitions were hard-coded but they’ve never been updated or sense checked since.

These days, market data vendors have sophisticated calculation methods and peer group definitions to partition sectors consistently across the board, making comparisons more intelligent and transparent. Making use of these peer groups will avoid advisors and distributors seeing mismatched rankings that make peer group analysis confusing.

4. Ratings

6 Ways to Better Utilize Morningstar and Lipper Data 4Why cut and paste ratings images onto fact sheets and then have to manually check all these and make sure they are correct and valid at the time of publication? This can all be automated through a market data feed.

5. Data Cleansing

How many times have you heard your colleagues in client services or marketing groups saying, “We can’t trust (X’s) data.” Well times are a-changing. There are more efficient ways than telephone, e-mails or data scraping to ensure that market data vendors have your most up to date information. Accurate data is in everyone’s best so by collating your data in one place internally and managing the distribution back to market data vendors, everyone can win. They may even thank you for this in some material way.

6. Risk Ratios

6 Ways to Better Utilize Morningstar and Lipper Data 5Many firms have adopted in-house techniques for calculating the “simple” ratios: Volatility, Sharpe, basic correlations, etc. Teams of analysts have historically undertaken these calculations. They need to be used for more complex analytics and management reporting. It is no longer necessary for them to do these basic level sums. These calculations are all standard and readily available.
By now, I hope you get the idea that there are actually many things you are doing in-house with data that simply don’t need to be done.

Our industry is becoming more standardized and that’s great news for everyone. Things can be done cheaper, faster and more transparently than ever before — and this means lower costs and happier investors, and standardization doesn’t mean that everything has to look the same.

Kurtosys recently highlighted the benefits of standardization with the launch of our Fund Component Gallery. By using different colors and shapes clients can maintain a branded, customized feel whilst still benefiting from all the advantages that standardization offers.

It’s the same story with industry data.

And perhaps even more important to fund managers is that standardization provides easier access to performance analysis and unique ways to reveal investment strategy.
Market data vendors like Lipper and Morningstar can help make your world more efficient. You just need a reliable plumber.

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