Morningstar launched Morningstar Analyst Rating for funds, the new global scale for qualitative fund ratings. This is a designation assigned by Morningstar fund research analysts around the world and derived from the company’s five pillar analytical framework that considers the following key areas: People, Process, Parent, Performance, and Price. Morningstar analysts evaluate each of these areas to arrive at the Analyst Rating.
The Morningstar Analyst Rating scale includes three positive ratings, one neutral rating and one negative rating. The top three tiers are expressed as medals – Gold, Sliver and Bronze – and reserved for funds that Morningstar analysts believe have sustainable advantages that position them well versus peers or the relevant benchmark on a risk-adjusted basis over a full market cycle.
“We’ve created a global standard for analyst-driven fund ratings that will be recognizable to investors worldwide,” said Christopher Traulsen, Morningstar’s Director of Fund Research for Europe and Asia. “We’re not changing the way we approach fund research, and our analysts continue to rate funds based on their conviction of a fund’s ability to outperform its benchmark or peers over the long term.“
For investors in Europe and Asia, the new Morningstar Analyst Rating replaces Morningstar’s previous qualitative rating scale of Elite, Superior, Standard, Inferior, and Impaired. In addition, Morningstar qualitative research report will be replaced by a new Global Fund Report. The Global Fund Report is the essential accompaniment to the Morningstar Analyst Rating. It explains the Morningstar analyst’s justification for the fund rating and includes a discussion of the analyst’s views on each of the five key pillars, through the analyst’s assignment of a Positive, Neutral, or Negative designation to each pillar. Global Fund Report will launch in Europe and Asia in early 2012.