Morningstar Assigns New Analyst Ratings to Six Strategies, Upgrades Six, and Downgrades Five in January 2019

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Morningstar Assigns New Analyst Ratings to Six Strategies, Upgrades Six, and Downgrades Five in January 2019

PR Newswire

CHICAGO, Feb. 11, 2019 /PRNewswire/ -- Morningstar, Inc. (Nasdaq: MORN), a leading provider of independent investment research, has published a summary of Morningstar Analyst Rating™ activity for 104 U.S. strategies that occurred in January 2019. Strategies include all vehicles that Morningstar covers, including open-end mutual funds, exchange-traded funds (ETFs), separately managed accounts (SMAs), and target-date series. The Morningstar Analyst Rating represents Morningstar's conviction in the strategy's ability to outperform on a risk-adjusted basis over the long term. The five-tiered, qualitative Morningstar Analyst Rating scale has three positive levels, indicating Morningstar Medalists—Gold, Silver, and Bronze—in addition to Neutral and Negative ratings.

In January 2019, Morningstar's manager research group assigned new ratings to six U.S. strategies and affirmed 83 strategies. Six strategies were upgraded, five were downgraded, and four were placed under review. 

"American Funds SMALLCAP World added more research capability recently to help manage its whopping $40 billion asset base, buoying the fund's ratings to Silver from Bronze," said Laura Pavlenko Lutton, Morningstar's North American practice leader, manager research. "Three equity divisions, who espouse similar long-term-oriented investment philosophy but do not share investment ideas, now manage this fund compared to the two teams it had in the past. This addition enhances diversification and invites different managers and analysts to play to their strengths."

The following Analyst Rating changes occurred in January 2019:


Vehicle Type

Previous Morningstar

Analyst Rating

Current Morningstar

Analyst Rating

New Ratings




BlackRock Advantage International

Mutual Fund

None

Bronze

BlackRock Advantage Large Cap Growth

Mutual Fund

None

Bronze

BlackRock Advantage Large Cap Value

Mutual Fund

None

Bronze

BlackRock Advantage Small Cap Growth

Mutual Fund

None

Bronze

Schafer Cullen Global High Dividend ADR

SMA

None

Bronze

Wells Fargo/TRP Institutional Large-Cap Growth Managed

SMA

None

Silver





Upgrades




American Funds SMALLCAP World

Mutual Fund

Bronze

Silver

American Funds Short-Term Bond Fund of America

Mutual Fund

Neutral

Bronze

BlackRock LifePath Dynamic

Target-Date Series

Neutral

Bronze

iShares National Muni Bond ETF

ETF

Bronze

Silver

PIMCO Emerging Markets Bond

Mutual Fund

Neutral

Bronze

T. Rowe Price European Stock

Mutual Fund

Bronze

Silver





Downgrades




DFA Tax-Managed US Targeted Value

Mutual Fund

Silver

Bronze

RiverPark/Wedgewood

Mutual Fund

Bronze

Neutral

T. Rowe Price High Yield

Mutual Fund

Gold

Bronze

Thornburg Limited-Term Municipal

Mutual Fund

Bronze

Neutral

Vanguard Convertible Securities

Mutual Fund

Bronze

Neutral





Under Review




Dreyfus Opportunistic Midcap Value

Mutual Fund

Bronze

Under Review

Hartford Schroders US Small/Mid-Cap Opportunities

Mutual Fund

Silver

Under Review

Hartford Schroders US Small Cap Opportunities

Mutual Fund

Silver

Under Review

USAA International

Mutual Fund

Bronze

Under Review

A list of the Analyst Ratings for 72 U.S. funds, eight target-date series, and three SMAs that Morningstar affirmed in January is available here.  

As of Jan. 31, 2019, Morningstar analysts had assigned a Morningstar Analyst Rating of Gold to 160 unique U.S. funds, a Silver rating to 394 funds, a Bronze rating to 618 funds, a Neutral rating to 722 funds, and a Negative rating to 37 funds. Morningstar Medalists currently account for approximately five percent of unique mutual funds available for sale in the United States and 62 percent of assets under management. Morningstar's manager research analysts rate approximately $12.3 trillion of U.S. investor assets, or approximately 70 percent of total investor assets in the United States.

A summary of last month's Morningstar Analyst Rating changes for U.S. funds is available on Morningstar.com in the latest Fund Spy: Medalist Edition here.

Morningstar launched its Analyst Rating for funds and Global Fund Reports in December 2011. Morningstar Medalists—Gold-, Silver-, and Bronze-rated funds—are funds that analysts determine are likely to outperform their peer groups and/or relevant benchmarks on a risk-adjusted basis over a market cycle of at least five years. The differences between the positive ratings indicate the level of the analyst's conviction in a fund's future performance. Analysts arrive at a rating through an evaluation of five key pillars: People, Process, Parent, Performance, and Price. The Analyst Rating methodology for mutual funds is available here and for ETFs here. The Analyst Rating methodology for SMAs is available here.

To view a complete list and supporting analysis for Analyst Ratings for U.S. funds, please visit www.morningstar.com. Premium Members have access to a Morningstar Medalists screener, where users can sort funds by Morningstar Rating, Morningstar Analyst Rating, Fund Family, Manager Tenure, Expense Ratio, and other metrics. Morningstar's Global Fund Reports, in-depth research reports that include a wealth of data and analysis, are available in Morningstar DirectSM, the company's web-based global investment analysis platform for institutional investors, and in Morningstar OfficeSM, a global practice and portfolio management solution for advisors.

Morningstar has approximately 115 manager research analysts worldwide who cover approximately 4,315 funds. The company provides data on approximately 240,940 open-end mutual funds, 12,200 closed-end funds, and 16,150 exchange-traded product listings as of Sept. 30, 2018.

About Morningstar, Inc.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offers an extensive line of products and services for individual investors, financial advisors, asset managers, retirement plan providers and sponsors, and institutional investors in the private capital markets. Morningstar provides data and research insights on a wide range of investment offerings, including managed investment products, publicly listed companies, private capital markets, and real-time global market data. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than $207 billion in assets under advisement and management as of Sept. 30, 2018. The company has operations in 27 countries. For more information, visit www.morningstar.com/company. Follow Morningstar on Twitter @MorningstarInc.

Morningstar's Manager Research Group consists of various wholly owned subsidiaries of Morningstar, Inc. including, but not limited to, Morningstar Research Services LLC. Analyst Ratings are subjective in nature and should not be used as the sole basis for investment decisions. Analyst Ratings are based on Morningstar's Manager Research Group's current expectations about future events and therefore involve unknown risks and uncertainties that may cause such expectations not to occur or to differ significantly from what was expected. Analyst Ratings are not guarantees nor should they be viewed as an assessment of a fund's or a fund's or separately managed account's underlying securities' creditworthiness. This press release is for informational purposes only; references to securities or a separately managed account investment strategy in this press release should not be considered an offer or solicitation to buy or sell the securities or to invest in accordance with that strategy.

©2019 Morningstar, Inc. All rights reserved.

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Media Contact:
Mary Kate Marchesi, +1 312 348-3180 or marykate.marchesi@morningstar.com 
Sarah Wirth, +1 312 244-7358 or sarah.wirth@morningstar.com

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