Morningstar analysts have taken a critical eye to the fund universe lately. The fund research company just downgraded ratings for 10 funds — including two Vanguard products — and placed one target-date series under review.
A month earlier, the Chicago-based research group upgraded seven funds, downgraded four funds and gave new ratings to 29 mutual funds and 33 exchange-traded funds, while placing one fund under review.
The Morningstar Analyst Ratings represent analysts’ views that a fund can outperform its peers on a risk-adjusted basis over the long term. The five-tiered, qualitative scale has three positive levels — Gold, Silver and Bronze — as well as neutral and negative ratings.
Overall, 134 U.S. funds have a rating of Gold, 313 are Silver, 509 are Bronze, 509 are Neutral, and an unlucky 13 are Negative.
The medalist-rated funds, referred to as Morningstar Medalists, account for about 9% of funds sold in the U.S. and some 61% of assets under management. (Overall, the group’s analysts rate some $12 trillion of U.S. investor assets, or roughly 70% of U.S. investor assets.)
The April 2017 updates are as follows:
- Ariel International: Bronze (from Neutral)
- PIMCO Low Duration: Silver (from Bronze)
- Prudential Total Return Bond: Silver (from Bronze)
- Schwab International Index: Silver (from Bronze)
- Schwab Total Stock Market Index: Silver (from Bronze)
- Schwab S&P 500 Index: Silver (from Bronze)
- SPDR S&P MidCap 400 ETF: Silver (from Bronze)
- BlackRock Basic Value: Neutral (from Bronze)
- Bridgeway Blue Chip 35 Index: Bronze (from Silver)
- CBRE Clarion Long/Short: Neutral (from Bronze)
- Columbia Acorn International: Bronze (from Silver)
- FPA Capital: Neutral (from Bronze)
- Franklin Mutual Global Discovery: Bronze (from Silver)
- Invesco Real Estate: Neutral (from Bronze
- Merger: Bronze (from Silver)
- Vanguard European Stock Index: Silver (from Gold)
- Vanguard FTSE Europe ETF: Silver (from Gold)
- Wells Fargo Dow Jones Target-Date Series: Neutral
New Ratings (Partial List)
- Ariel Appreciation: Bronze
- Franklin Mutual Financial Services: Bronze
- Hartford International Opportunities Y: Bronze
- iShares Currency Hedged MSCI Eurozone: Bronze
- Vanguard FTSE Pacific ETF: Bronze
The full list of new Morningstar ratings for 30 funds is available here.
— Check out Lipper Names Top Fund Managers of 2017 on ThinkAdvisor.