Morningstar evaluates funds based on three key pillars – Process, People and Parent. Morningstar also assesses Performance and Price when assigning Medalist Ratings to vehicles. The Medalist Ratings indicate which investments Morningstar believes are likely to outperform a relevant index or peer group average on a risk-adjusted basis over time.
1. Process: What is the fund’s strategy and does management have a competitive advantage enabling it to execute the process well and consistently over time?
2. People: What is Morningstar’s assessment of the manager’s talent, tenure, and resources?
3. Parent: What priorities prevail at the firm? Stewardship or salesmanship?
4. Performance: Is the fund’s performance pattern logical given its process? Has the fund earned its keep with strong risk-adjusted returns over relevant time periods? It is not a distinct pillar. Rather, Morningstar considers performance within the context of the other pillar assessments it conducts, notably People and Process.
5. Price: Is the fund a good value proposition compared with similar funds sold through similar channels? Morningstar takes fees into account when assigning ratings to vehicles but does not maintain a separate Price Pillar.
The conduct of Morningstar’s analysts is governed by Morningstar’s Code of Ethics, Securities Trading and Disclosure Policy, and Morningstar Manager Research Integrity Policy. For information regarding conflicts of interest, please click Compliance & Disclosures
The report may contain a Morningstar Medalist Rating or Pillar Scores that were derived quantitatively and/or quantitatively-driven written analysis (collectively, “Quantitatively-Driven Content”) generated by a series of statistical models intended to replicate Morningstar’s analyst output (“Analyst-Driven Content”). Given the nature of quantitatively driven content, this report may not be fully attributable to one analyst. To learn more about the Morningstar Medalist Rating and accompanying written analysis, please refer to the methodology document.
Sustainability Summary: The Sustainability Summary is autogenerated text produced on investments that have both a Morningstar Sustainability Rating and a Carbon Risk Score, contextualizing various ESG metrics and datapoints proprietary to Morningstar and Sustainalytics.
How do we decide what investments receive a Sustainability Summary?
Morningstar generates quantitatively driven content that covers the Environmental, Social, and Governance (ESG) characteristics for managed investments that have both a Morningstar Sustainability Rating and a Carbon Risk Score, called the Sustainability Strategy Summary. To generate individualized content, the Sustainability Summary requires sufficient data to create its framework of “mental models” designed to mimic content written by analysts. The Sustainability Strategy Summary uses an algorithm designed to predict the ESG analysis that analysts would produce on the investment product if they covered it.
"Position in Investment" is based on data surveyed from the Statement of Additional Information ("SAI"). Data may not include positions held across all investment vehicles.
Not Disclosed: All persons who have not disclosed their gender identity.
Not Available: No gender data is available for a particular manager.
Morningstar Risk is an assessment of the variations in a investment's monthly returns in comparison to similar investments. The greater the variation, the larger the risk score.
Morningstar Return is an assessment of the investment's excess return over a risk-free rate (the return of the 90-day Treasury bill) in comparison to similar investments.
Investments with less than three years of performance history are not rated.
Morningstar Risk & Return
Active share is a similarity measure of the equity holdings of a fund and its benchmark. An active share score of 0 indicates that the equity portion of a fund and its benchmark are the same equities in the same proportions. An active share score of 100 indicates that the equity portion of the fund and its benchmark have no common holdings. Active share is a valuable complement to returns based similarity measures like best fit r-squared and tracking error as it captures the differences in the actual holdings.
We’re using the ETF proxy benchmark of the Morningstar category assigned index due to entitlement and distribution reasons.
Funds eligible for active share must meet the following criteria: