Morningstar is taking the wraps off its sixth broad asset classification category. The new asset classification, dubbed Alternative Funds, will include currency, long-short, precious metals and bear market funds.

Previously, the Chicago-based firm had used five asset categories for fund managers: domestic stock, international stock, taxable bond, municipal bond, and balanced.

Morningstar analysts say they created the Alternative category since those assets' performance show "little to no correlation with more traditional stocks and bonds" and "didn't look or act like anything around them."

"We think the alternative classification is more appropriate for currency, long-short, precious metals, and bear market funds," wrote Morningstar's Karen Dolan.

Meanwhile, Morningstar also added to new categories within asset classes and eliminated a third. The new categories are Global Real Estate and Currency. Morningstar noted that until 2005 the only currency mutual fund was the Franklin Templeton Hard Currency but that there are now eight funds and 26 ETFs investing in currencies.

Dropped from Morningstar's category rolls is the Florida Municipal Bond Category. The category is a victim of changes the repeal of the Florida intangibles tax which negated any advantage to holding Florida munis. 

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