CHICAGO, Jan. 13, 2015 /PRNewswire/ -- Morningstar, Inc. (NASDAQ: MORN), a leading provider of independent investment research, has announced a summary of Morningstar Analyst Rating™ changes for U.S. funds that occurred in December 2014. 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 December, Morningstar analysts upgraded three U.S. fund ratings, downgraded five fund ratings, and assigned three new ratings. As of Dec. 31, 2014, 141 U.S. funds had a Morningstar Analyst Rating of Gold, 281 funds had a Silver rating, 352 funds were rated Bronze, 319 funds had a Neutral rating, and 39 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.
Morningstar upgraded the following U.S. mutual funds in December:
- Fidelity Intermediate Bond, upgraded to Silver from Bronze, for its risk-adjusted performance versus its prospectus benchmark and peers and experienced management team.
- BlackRock Total Return, upgraded to Bronze from Neutral, for the management team's ability to meld its bottom-up insights with its macroeconomic outlook.
- Loomis Sayles Core Plus Bond, upgraded to Gold from Silver, for significant investments in quantitative tools and risk management, and lowering expenses.
Morningstar downgraded the following U.S. mutual funds in December:
- American Century Small Cap Value, downgraded to Neutral from Silver, because of lead manager Ben Giele's departure.
- Osterweis, downgraded to Bronze from Silver, because of lagging performance during the past market cycle.
- Neuberger Berman Genesis, downgraded to Bronze from Silver, because of growing concern about the fund's large asset base and potential liquidity issues.
- Delafield, downgraded to Bronze from Silver, because of uncertainty associated with the fund's more-volatile holdings.
- T. Rowe Price Spectrum Growth, downgraded to Bronze from Silver, because of management changes at underlying funds representing about 40 percent of this fund's assets.
Morningstar assigned new ratings to the following funds in December:
- American Century Intermediate-Term Tax-Free Bond, assigned a Neutral rating—despite an experienced management team, consistent strategy, and attractive price tag, the fund hasn't delivered compelling returns.
- Deutsche Intermediate Tax/AMT Free and Deutsche Strategic High Yield Tax-Free, both assigned a Bronze rating—their seasoned management has delivered sound long-term performance while keeping volatility in check.
A summary of last month's 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.
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 100 manager research analysts worldwide who cover approximately 4,300 funds. The company provides data on approximately 175,000 open-end mutual funds, 9,700 closed-end funds, and 11,000 exchange-traded product listings as of Sept. 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 479,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 13 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 Sept. 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.
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Nadine Youssef, +1 312-696-6601 or [email protected]
SOURCE Morningstar, Inc.