This data set provides a broad breakdown of a fund's geographical exposure. Each region's exposure is presented as a percentage of non-cash equity assets held by the fund. Regional exposure information summarizes a portfolio's exposure to geopolitical risk. It also provides a reference point for understanding fund returns. Some fund managers follow a "top down" discipline, where they direct their investments into regions they consider good opportunities.
For stock funds, regional exposure is calculated as a percentage of stocks; for bond funds, the data is available for international bond funds only, and is culled from quarterly surveys.
Morningstar recently revised its existing region scheme to accommodate a more refined classification. The structure of Morningstar’s regions is a single unified scheme with some countries at its base. These countries are classified into geographic regions. The regions are then folded into three super geographic regions of the Americas, Greater Europe and Greater Asia. They are based on the following three criteria:
Common economic/currency denominator
Sufficient population of publicly traded equities
Logistics and geography
These super regions alongside Morningstar’s new Economic Spheres are meant to provide quick, easy to understand and unified portfolio construction and asset allocation tool.
Morningstar Super Regions
The Americas: This super region includes North America (the U.S. and Canada) and Emerging Central & Latin America. Within this super region, we have the following economic regions:
North America: the U.S. and Canada
Emerging Central & Latin America: Mexico and all of Central and South America
Greater Europe: This super region includes the United Kingdom, continental Europe (Western and Eastern Europe, Russia) and Africa. Within this super region, countries are classified as Euro and Non-Euro, as well as “Developed” and “Emerging”. Within this super region, we have the following economic regions:
Western Europe: ex U.K.; Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain
Emerging Europe: Russia and other Eastern European countries
Greater Asia: This super region includes the Middle East and all other Asian countries In addition to stand alone countries, or sub-regions such as Japan and Australasia (Australia and New Zealand). Within this super region, we have the following economic regions:Japan
Australasia: Australia and New Zealand
Emerging 4 Tigers: Hong Kong, Singapore, South Korea, Taiwan
Emerging Asia: Asia ex 4 Tigers; Near East, Middle East, Far East
Not Classified: Not all individual stocks or all securities in fund portfolios can be identified or classified by Morningstar. If a security cannot be identified or classified, it will be reflected in this number.