July 9, 2019

Morningstar Assigns New Analyst Ratings to 28 Strategies, Upgrades Five, and Downgrades Eight in June 2019

CHICAGO, July 9, 2019 /PRNewswire/ -- Morningstar, Inc. (Nasdaq: MORN), a leading provider of independent investment research, has published a summary of Morningstar Analyst Rating™ activity for 155 U.S. strategies that occurred in June 2019. Strategies include all vehicles that Morningstar covers, including open-end mutual funds, exchange-traded funds (ETFs), separately managed accounts (SMAs), target-date series, and collective investment trusts (CITs). 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 June 2019, Morningstar's manager research group assigned new ratings to 28 U.S. strategies and affirmed 105 strategies. Five strategies were upgraded, eight were downgraded, and eight were placed under review. 

"In June we upgraded Dodge & Cox Global Bond's Morningstar Analyst Rating to Silver from Bronze, due to its higher confidence level in the team's foreign-exchange capabilities," said Laura Pavlenko Lutton, Morningstar's North American practice leader, manager research. "On the flip side, we downgraded Vulcan Value Partners to Neutral from Bronze, since the fund hasn't been effective enough in its execution. Manager C.T. Fitzpatrick looks for companies with competitive advantages that allow them to earn high—and increasing—returns on capital, but this prudent approach hasn't led to benchmark-beating results."

The following Analyst Rating changes occurred in June 2019:


Vehicle Type

Previous
Morningstar
Analyst Rating

Current
Morningstar
Analyst Rating

New Ratings




Brandes Emerging Markets Value

Mutual Fund

None

Silver

Fidelity Corporate Bond

ETF

None

Neutral

First Trust Emerging Markets Local Currency Bond

ETF

None

Negative

First Trust Institutional Preferred Securities and Income

ETF

None

Neutral

First Trust Preferred Securities & Income  

ETF

None

Neutral

First Trust Senior Loan

ETF

None

Neutral

First Trust SSI Strategic Convertible Securities

ETF

None

Neutral

First Trust Tactical High Yield

ETF

None

Neutral

Goldman Sachs GQG Partners International Opportunities

Mutual Fund

None

Silver

Hartford Municipal Opportunities ETF

Mutual Fund

None

Neutral

Invesco Oppenheimer Portfolio Series: Active Allocation

Mutual Fund

None

Neutral

Invesco Oppenheimer Portfolio Series: Conservative Investor

Mutual Fund

None

Neutral

Invesco Oppenheimer Portfolio Series: Growth Investor

Mutual Fund

None

Neutral

Invesco Oppenheimer Portfolio Series: Moderate Investor

Mutual Fund

None

Neutral

JPMorgan Global Bond Opportunities

ETF

None

Neutral

Manning & Napier Pro-Mix

CIT

None

Bronze

Morgan Stanley Institutional Fund 

Mutual Fund

None

Bronze

Principal Active Income

ETF

None

Neutral

Principal Investment Grade Corporate Active

ETF

None

Neutral

Prudential Core Plus Bond

CIT

None

Silver

SPDR SSgA Income Allocation

ETF

None

Neutral

SPDR SSgA Ultra Short Term Bond

ETF

None

Neutral

T. Rowe Price Growth Stock

CIT

None

Bronze

T. Rowe Price Institutional Frontier Markets Equity

Mutual Fund

None

Bronze

T. Rowe Price QM US Small & Mid-Cap Core Equity

Mutual Fund

None

Silver

T. Rowe Price U.S. SC Value Equity

CIT

None

Bronze

Wells Fargo Enhanced Stock Market

CIT

None

Neutral

WisdomTree Emerging Markets Local Debt

ETF

None

Neutral





Upgrades




BlackRock Emerging Markets

Mutual Fund

Neutral

Bronze

BlackRock Global Long/Short Equity

Mutual Fund

Bronze

Silver

Dodge & Cox Global Bond

Mutual Fund

Bronze

Silver

FlexShares iBoxx 3-Year Target Duration TIPS

ETF

Bronze

Silver

Wells Fargo Emerging Markets Equity

Mutual Fund

Neutral

Bronze





Downgrades




MainStay Floating Rate

Mutual Fund

Bronze

Neutral

PIMCO Emerging Markets Currency and Short/Term Investments

Mutual Fund

Bronze

Neutral

PIMCO Emerging Markets Bond

Mutual Fund

Bronze

Neutral

PIMCO Emerging Markets Local Currency and Bond

Mutual Fund

Bronze

Neutral

Templeton Global Balanced

Mutual Fund

Bronze

Neutral

USAA Growth and Tax Strategy

Mutual Fund

Bronze

Neutral

Vulcan Value Partners

Mutual Fund

Bronze

Neutral

Vulcan Value Partners Large Cap Value

SMA

Bronze

Neutral





Under Review




Fidelity New Markets Income

Mutual Fund

Silver

Under Review

Invesco Oppenheimer Capital Income

Mutual Fund

Neutral

Under Review

Invesco Oppenheimer Global Allocation

Mutual Fund

Neutral

Under Review

Invesco Oppenheimer Senior Floating Rate

Mutual Fund

Neutral

Under Review

JHancock Global Absolute Return Strategies

Mutual Fund

Neutral

Under Review

USAA Tax Exempt Intermediate-Term

Mutual Fund

Neutral

Under Review

USAA Tax Exempt Short-Term

Mutual Fund

Neutral

Under Review

USAA VA Bond

Mutual Fund

Neutral

Under Review

A list of the Analyst Ratings for 105 U.S. funds that Morningstar affirmed in June is available here.

As of June 30, 2019, Morningstar analysts had assigned a Morningstar Analyst Rating of Gold to 237 unique U.S. funds, a Silver rating to 432 funds, a Bronze rating to 622 funds, a Neutral rating to 751 funds, and a Negative rating to 35 funds. Morningstar Medalists currently account for approximately six 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 $12.8 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, CITs, and model portfolios is available here. In March, Morningstar began assigning its forward-looking Morningstar Analyst Ratings to SMA target-risk series that are representative of model portfolios. Morningstar recently announced it will enhance two of its forward-looking fund ratings systems, the Morningstar Analyst Rating™ for funds (Analyst Rating) and the Morningstar Quantitative Rating™ for funds (Quantitative Rating). The enhanced ratings, which are based on an updated assessment framework, will begin to take effect on Oct. 31, 2019. Read more in the press release issued on July 8, 2019, 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 130 manager research analysts worldwide. The company provides data on approximately 249,780 open-end mutual funds, 13,010 closed-end funds, and 16,720 exchange-traded product listings as of March 31, 2019.

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 $210 billion in assets under advisement and management as of March 31, 2019. 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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