Morningstar Changes Analyst Rating for 10 PIMCO Funds, Three Other U.S. Funds

CHICAGO, Oct. 13, 2014 /PRNewswire/ -- Morningstar, Inc. (NASDAQ: MORN), a leading provider of independent investment research, today announced Morningstar Analyst Rating™ changes for several U.S. funds. The Morningstar Analyst Rating for funds represents Morningstar's conviction in the fund'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 the six weeks since the end of August, Morningstar analysts upgraded one U.S. fund rating and downgraded three fund ratings, including PIMCO Total Return. On Sept. 26, Morningstar placed all 39 analyst-rated PIMCO funds Under Review following the departure from the firm of Bill Gross, founder, managing director, and chief investment officer. As of Oct. 10, Morningstar analysts had reaffirmed, upgraded, or downgraded Analyst Ratings for 10 PIMCO funds. Morningstar will continue to review Analyst Ratings for PIMCO funds as part of an ongoing assessment of Gross' departure based on the Morningstar Analyst Rating methodology. In November, Morningstar will announce a full summary of October's Analyst Rating changes for U.S. mutual funds.

Morningstar reaffirmed Analyst Ratings for the following PIMCO funds as of Oct. 10:

• PIMCO All Asset, reaffirmed Analyst Rating of Gold
• PIMCO All Asset All Authority, reaffirmed Analyst Rating of Silver
• PIMCO EqS® Long/Short, reaffirmed Analyst Rating of Neutral
• PIMCO Income A, reaffirmed Analyst Rating of Silver
• PIMCO Municipal Income II, reaffirmed Analyst Rating of Neutral

Morningstar upgraded the following PIMCO fund as of Oct. 10:

• PIMCO Municipal Bond, upgraded to Bronze from Neutral

Morningstar downgraded the following PIMCO funds as of Oct. 10:

• PIMCO Corporate & Income Opportunities, downgraded to Neutral from Bronze
• PIMCO Emerging Local Bond, downgraded to Silver from Gold
• PIMCO Emerging Markets Bond A, downgraded to Silver from Gold
• PIMCO Total Return, downgraded to Bronze from Gold

As of Sept. 30, 2014, 138 U.S. funds had a Morningstar Analyst Rating of Gold, 285 funds had a Silver rating, 325 funds were rated Bronze, 330 funds had a Neutral rating, and 40 funds were rated Negative. Approximately 10 percent of mutual funds available for sale in the United States are currently Morningstar Medalists. Morningstar's manager research team covers about $8 trillion of U.S. investor assets, which is equivalent to approximately 70 percent of total investor assets in the United States.

Aside from Analyst Rating changes for PIMCO funds, Morningstar changed Analyst Ratings for the following U.S. mutual funds in September:

• Franklin Flex Cap Growth, downgraded to Neutral from Bronze
• Invesco International Growth, upgraded to Silver from Bronze
• TFS Market Neutral, downgraded to Silver from Gold

A summary of the most recent Morningstar Analyst Rating changes for U.S. mutual 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 November 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 Medalist 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 is available here. The qualitative Analyst Rating complements the quantitative Morningstar Rating™, commonly known as the "star rating," which measures risk-adjusted performance. The Morningstar Rating methodology 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 Direct^SM, the company's web-based global investment analysis platform for institutional investors, and in Morningstar Office^SM, a global practice and portfolio management solution for advisors.

Morningstar has approximately 100 manager research analysts worldwide who cover approximately 4,300 funds. The company provides data on approximately 172,000 open-end mutual funds, 8,000 closed-end funds, and 10,900 exchange-traded product listings as of June 30, 2014.

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, and retirement plan providers and sponsors. Morningstar provides data on approximately 473,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 12 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $169 billion in assets under advisement and management as of June 30, 2014. The company has operations in 27 countries.

Analyst Ratings are subjective in nature and should not be used as the sole basis for investment decisions. Analyst Ratings are based on Morningstar analysts' current expectations about future events and therefore involve unknown risks and uncertainties that may cause Morningstar's expectations not to occur or to differ significantly from what was expected. Morningstar does not represent its Analyst Ratings to be guarantees nor should they be viewed as an assessment of a fund's or the fund's underlying securities' creditworthiness. This press release is for informational purposes only; it should not be considered an offer or solicitation to buy or sell the mutual funds noted within. 

©2014 Morningstar, Inc.  All rights reserved.

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Media Contact:
Courtney Cebula, +1 312-696-6068 or [email protected]

SOURCE Morningstar, Inc.