Morningstar's June Winners & Losers

A recent update from the firm's analysts on upgrades, downgrades, and new strategy ratings.

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In June, Morningstar analysts assigned ratings to 28 new strategies, while upgrading five and downgrading eight strategies. In addition, eight strategies were placed under review.

Morningstar recently updated its Analyst Rating activity for 155 U.S. open-end mutual funds, exchange-traded funds and separately managed accounts and collective investment trusts for June 2019.

“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, in a statement. “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 Morningstar Analyst Rating for funds represents the firm’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 — Gold, Silver and Bronze — in addition to Neutral and Negative ratings.

Morningstar Medalists currently account for approximately 6% of unique mutual funds available for sale in the United States and 62% of assets under management. According to the firm, it rates approximately $12.8 trillion of U.S. investor assets, or about 70% of total investor assets in the United States.

The following rating changes occurred in June 2019:

Upgrades (4 mutual funds, 1 ETF)

Downgrades (7 mutual funds, 1 SMA)

Under Review (8 mutual funds)

New Ratings (10 mutual funds, 13 ETFs, 5 CITs)

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