September 11, 2019

Morningstar Assigns New Analyst Ratings to Two Strategies, Upgrades Eight, and Downgrades Four in August 2019

CHICAGO, Sept. 11, 2019 /PRNewswire/ -- Morningstar, Inc. (Nasdaq: MORN), a leading provider of independent investment research, published a summary of Morningstar Analyst Rating™ activity for 149 U.S. strategies that occurred in August 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 August 2019, Morningstar's manager research group assigned new ratings to two U.S. strategies and affirmed 134 strategies. Eight strategies were upgraded, four were downgraded, and one was placed under review. 

"In July we upgraded Fidelity Select Health Care from Silver to Gold as it continues to stand apart from competitors due to deep subsector expertise and an outstanding team of analysts," said Russ Kinnel, chair of Morningstar's North America ratings committee and editor of Morningstar FundInvestor. "Downgraded funds include MFS Value, which dropped from Gold to Silver following the announcement of the upcoming departure of veteran co-manager Steven Gorham. Gorham has steered the strategy to success since 2002 but plans to step down in December 2020 to focus on other MFS funds. Nevin Chitkara has been a co-manager since 2006 and a key contributor, so we still have conviction in the fund."

The following Analyst Rating changes occurred in August 2019:


Vehicle Type

Previous Morningstar
Analyst Rating

Current Morningstar
Analyst Rating

New Ratings




Angel Oak Multi-Strategy Income

Mutual Fund

None

Neutral

Fidelity Growth Discovery

Mutual Fund

None

Neutral





Upgrades




BlackRock Balanced Capital

Mutual Fund

Neutral

Bronze

Fidelity Advisor Health Care

Mutual Fund

Silver

Gold

Fidelity Select Health Care

Mutual Fund

Silver

Gold

Harding Loevner Frontier Emerging Markets

Mutual Fund

Neutral

Bronze

Janus Henderson Enterprise

Mutual Fund

Bronze

Silver

Janus Henderson Mid Cap Growth

SMA

Bronze

Silver

Matthews Japan Investor

Mutual Fund

Bronze

Silver

Thornburg Limited Term Income

Mutual Fund

Neutral

Bronze





Downgrades




American Century Value Investor

Mutual Fund

Silver

Bronze

Gateway

Mutual Fund

Silver

Bronze

MFS Value

Mutual Fund

Gold

Silver

Principal Global Multi-Strategy

Mutual Fund

Bronze

Neutral





Under Review




MFS Total Return

Mutual Fund

Bronze

Under Review

A list of the Analyst Ratings for 131 U.S. funds and 3 SMAs that Morningstar affirmed in August is available here.

As of Aug. 31, 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 630 funds, a Neutral rating to 748 funds, and a Negative rating to 34 funds. Morningstar Medalists currently account for approximately 6% of unique mutual funds available for sale in the U.S. and 63% of assets under management in the U.S. Morningstar's manager research analysts rate approximately $13.5 trillion of U.S. investor assets, or approximately 70% of total investor assets in the U.S.

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 November 2011. Morningstar Medalists 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 125 manager research analysts worldwide. The company provides data on approximately 252,960 open-end mutual funds, 13,140 closed-end funds, and 20,040 exchange-traded product listings as of June 30, 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 about $220 billion in assets under advisement and management as of June 30, 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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