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Morningstar’s August Winners & Losers

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Morningstar has published its latest monthly summary of Analyst Rating activity for 527 fund share classes, ETFs and separately managed accounts/collective investment trusts.

In August 2020, the research firm upgraded 46, downgraded 154 and added 26 to its coverage. Nineteen came under review due to material changes including manager departures.

Of the 117 unique strategies (after “sifting out” multiple share classes and vehicles), analysts assigned first-time ratings to five.

The Morningstar Analyst Rating keeps track of a 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.

Changes to its analyst rating methodology went live in October.

The new system gives more weight to fees and sets the bar higher for active funds, while shifting how Morningstar assigns ratings to fund share classes to account for specific fees being levied on each share class.

Highlights of the latest ratings include the following:

Upgrades (46):

  • Vanguard Short-Term Treasury ETF (to Gold from Silver)
  • Baron Growth (to Silver from Bronze)
  • IShares Edge MSCI USA Value Factor ETF (to Silver from Bronze)

Downgrades (154):

  • Harding Loevner Global Equity (People Rating to Above Average from High)
  • Fidelity Extended Bond Market Index (to Silver from Gold)

New Ratings (5):

  • Invesco S&P MidCap Low Volatility ETF (Silver)

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