Morningstar may have a hit on its hands when it introduces its hedge fund database in the near future. Not everyone, however, is convinced that the new database will share the same success as the fund tracker’s mutual fund service, and Morningstar’s HF debut is causing some concern among financial advisers, according to Investment News. “I worry about making complex investment information available to the public,” Clinton Struthers, president of Midland, Mich.-based Struthers Financial Services told IN. Struthers said that giving Morningstar customers access to HF information will complicate his job since as financial advisers, he and his peers have “a responsibility to know what we’re talking about,” but by making the information “available to Joe Public...more often than not, Joe Public is misinterpreting the information and ends up getting hurt.” Another potential problem, according to IN, is that despite bulking up its coverage to an estimated 6,000 with the acquisition of InvestForce, there are still plenty of hedge funds Morningstar won’t be able to snag, because unlike mutual funds, they don’t have to register with a regulator and make information available. In addition, the information gathered from hedge funds may not be nearly as good as Morningstar receives from mutual funds, the reason being that hedge funds don’t have to disclose it. “Hedge fund industry data is as dirty as it gets because of the voluntary nature of reporting,” Thomas Orecchio of Old Tappan, N.J.-based Greenbaum & Orecchio told IN, “and that means garbage in, garbage out.”
