October 8, 2018

Morningstar Assigns New Analyst Ratings to Four U.S. Funds and Six Separately Managed Accounts; Upgrades Five Funds; Downgrades Five Funds in September 2018

CHICAGO, Oct. 8, 2018 /PRNewswire/ -- Morningstar, Inc. (NASDAQ: MORN), a leading provider of independent investment research, has published a summary of Morningstar Analyst Rating™ activity for 101 U.S. open-end mutual funds, exchange-traded funds (ETFs), and seven separately managed accounts (SMAs) that occurred in September 2018. 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 September, Morningstar's Manager Research Group assigned new ratings to four U.S. funds. In addition, analysts upgraded ratings for five funds, downgraded ratings for five funds, affirmed ratings for 87 funds, and placed two funds' ratings under review. New as of last month, analysts also assigned new ratings to six SMAs and affirmed ratings for one SMA.

"We upgraded PIMCO Active Bond ETF from Neutral to Silver as it became clear that new management has consistently implemented a new steady-income-producing strategy since May 2017," said Laura Pavlenko Lutton, Morningstar's director of manager research for North America. "The goal behind bringing in experienced managers David Braun, Dan Hyman, and Jerome Schneider was to align the team with the strategy's new goals. PIMCO added Braun to this team in part based on his expertise in managing other tax-aware and income-focused portfolios. Although he doesn't have a public record, PIMCO has a history of producing great results with other income-focused portfolios, and Hyman, Schneider, and the rest of the PIMCO team supporting this offering have delivered excellent results at other strategies."

As of Sept. 30, 2018, Morningstar analysts had assigned a Morningstar Analyst Rating™ of Gold to 158 unique U.S. funds, a Silver rating to 343 funds, a Bronze rating to 600 funds, a Neutral rating to 677 funds, and a Negative rating to 19 funds. Morningstar Medalists currently account for approximately five percent of unique mutual funds available for sale in the United States and 69 percent of assets under management. Morningstar's manager research analysts rate approximately $12.6 trillion of U.S. investor assets, or approximately 62 percent of total investor assets in the United States.

The following Morningstar Analyst Rating changes occurred in September 2018:


Previous
Morningstar
Analyst Rating

Current
Morningstar
Analyst Rating

New Ratings



JMA Large Cap Growth Equity (SMA)

None

Silver

JMA Mid Cap Growth Equity (SMA)

None

Bronze

Luther King Capital Management Small-Mid Cap Equity (SMA)

None

Neutral

Neuberger Berman Small Cap Intrinsic Value (SMA)

None

Bronze

Nuveen International Growth ADR (SMA)

None

Neutral

Renaissance Large Cap Growth (SMA)

None

Neutral

AMG Renaissance Large Cap Growth

None

Neutral

LKCM Small-Mid Cap Equity

None

Neutral

Neuberger Berman Intrinsic Value

None

Bronze

Nuveen International Growth

None

Neutral




Upgrades



BlackRock Technology Opportunities

Neutral

Bronze

Fidelity Advisor Emerging Asia

Neutral

Bronze

Fidelity Emerging Asia

Neutral

Bronze

PGIM Jennison Health Sciences

Bronze

Silver

PIMCO Active Bond ETF

Neutral

Silver




Downgrades



Guggenheim Directional Allocation

Neutral

Negative

Harbor Capital Appreciation

Gold

Silver

Harbor International

Silver 

Bronze

PGIM Jennison Growth

Gold

Silver

T. Rowe Price Real Estate

Gold

Bronze




Under Review



AMG Managers Amundi Short Duration Government

Neutral

Under Review

Fidelity High Income

Silver

Under Review

A list of the Analyst Ratings for 87 U.S. funds and one SMA that Morningstar affirmed in September is available here.

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 hereand 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 124 manager research analysts worldwide who cover approximately 4,350 funds. The company provides data on approximately 235,590 open-end mutual funds, 10,880 closed-end funds, and 15,170 exchange-traded product listings as of June 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 $203 billion in assets under advisement and management as of June 30, 2018. The company has operations in 27 countries.

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.

©2018 Morningstar, Inc. All rights reserved.

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Sarah Wirth, +1 312 244-7358 or sarah.wirth@morningstar.com

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