Morningstar
RecommendedMorningstar AwardsWhats New IconETFs Whats New IconIncome Week Whats New IconThematic Investing Whats New IconSign Up to Our Newsletters Open Window Icon
Most Popular

Our New Fund Ratings & Reports

Morningstar has launched analyst-driven Qualitative Ratings for European & Asian funds

Christopher J. Traulsen, CFA 21 January, 2009 | 9:54AM
Facebook Twitter LinkedIn
Font-Size
Today,
we are launching two groundbreaking new tools to help fund investors and their advisers: The Morningstar® Fund Research Report and the Morningstar Qualitative RatingTM for funds.

The Report and Rating are in-depth and transparent, and most importantly, they are also completely independent: Morningstar does not seek or accept payment from fund houses for issuing ratings or reports on funds. We have always believed investors have the right to unbiased research conducted solely on their behalf, and that need is never more apparent than now. With uncertainty roiling global markets, we believe it's paramount th

at investors and advisers have access to objective research they can trust.

Our independence makes a real difference:

It gives us the freedom to cover the funds that investors need information on. In all, we have over 700 funds targeted for coverage in the UK alone, and more than 3,000 funds targeted across Europe and Asia.

It allows our analysts to base our coverage on where investors put their assets--we aim to cover up to 70% of assets under management in each peer group, and we leave room to add smaller funds we think merit coverage. Put differently, we aim to cover funds with significant investor assets, regardless of whether they are good, bad, or ugly--if investors are in a fund, they have the right to high quality research on that offering, and we will strive to deliver it. Because we don't rely on performance screens to dictate our coverage list, funds won't be dropped from coverage during a period of underperformance--indeed, we believe that's the very time when investors most need an informed opinion on a fund. Moreover, we'll cover small funds and/or new funds if we think there is investor interest or that we can add something of value to investors by doing so.

Finally, being independent allows us to be forthright in our ratings and written opinions. Our analysts work for you, not for the fund companies. Our ratings scale reflects this--instead of having three "good" ratings as is common practice with other services, we have five ratings that span the quality spectrum: Elite, Superior, Standard, Inferior, and Impaired.

We assess five key areas for each fund: People, Parent, Process, Price, and Performance. Using our own industry leading in-house data, public documents, and comprehensive interviews with fund managers and key fund company executives, our analysts evaluate each of these areas in depth. Their assessments of each area are thoroughly debated and discussed by senior researchers, and then aggregated into the final rating. You can read a detailed explanation of our ratings methodology here.

Although the Morningstar Qualitative RatingTM for funds gives investors a quick snapshot of our opinion of a fund, the Morningstar® Fund Research Report is its essential complement. The written "Opinion" section on the first page of the report explains the basis for the Rating, while subsequent sections give more detail on each of the five underlying areas. It also seeks to elevate the debate beyond "good fund"/"bad fund" and to help investors and their advisers understand the biases in a fund's portfolio and how they are likely to influence its performance in various market environments. We supplement the discussion with rich, industry-leading data, including proprietary Morningstar holdings metrics and graphics, that enable investors to easily gauge the risks embedded in a fund's portfolio. Our goal is to ensure that investors and their advisers understand the proper role for a fund in a portfolio and to have the right expectations for the investment.

While these Reports and Ratings are new to the UK, qualitative fund research has been at the centre of Morningstar for more than 20 years now. In addition to our team of 28 fund analysts across Europe and Asia, eight of which are based in the UK under the leadership of UK Director of Fund Research Jackie Beard, we have extensive teams conducting and publishing qualitative fund research in China, Australia, Canada and the US. In every region, we base our analysts in the markets where the funds they cover are managed, and we have analysts in major cities throughout Europe and Asia and around the world. Our fund analysts also benefit from access to Morningstar's equity research team--one of the largest independent equity research staffs in existence today. We believe this combination of global scale and local expertise puts us in an ideal position to better serve investors.

The new Morningstar Qualitative RatingTM and Morningstar® Fund Research Report give investors and advisers two great new tools to make better decisions and truly understand their investments. But don't just take my word for it--we have posted a table of the currently available Ratings and Reports on funds available for sale in the UK below, and I encourage you to read through them. As always, we value your feedback, so please let us know what you think, and keep checking back as we build our library of Ratings and Reports.

View UK Press Kit

Funds Available for Sale in the UK
Fund Name Morningstar
Qualitative RatingTM		 Date Language PDF
Aberdeen Asia Pac & Jap Fd A Acc Superior 31/07/08 English
Aberdeen Ethical World Fd C Acc Superior 30/09/08 English
Aberdeen European Growth A Acc Standard 14/10/08 English
Aberdeen Glb World Equity A2 Acc Superior 08/06/08 Italian
Aberdeen Japan Growth A Acc Standard 01/12/08 English
Aberdeen UK Equity Income A Acc Standard 14/10/08 English
Aberdeen UK Opportunities A Acc Standard 30/09/08 English
Aberdeen World Equity Superior 06/08/08 English
Artemis Capital Acc Superior 09/09/08 English
Artemis European Growth Superior 27/10/08 English
Artemis Global Growth Fund Acc Superior 03/10/08 English
Artemis Income Acc Superior 25/11/08 English
Artemis UK Growth fund Acc Inferior 04/09/08 English
Artemis UK Smaller Companies Acc Superior 14/08/08 English
Artemis UK Special Situations Acc Superior 15/10/08 English
AXA WF European Small Cap A Acc Standard 23/01/09 French
Fidelity American Standard 25/11/08 English
Fidelity American Special Situations Standard 25/11/08 English
Fidelity European Elite 02/12/08 English
Fidelity European Opportunities Superior 09/12/08 English
Fidelity Funds - France A Euro Standard 22/01/09 French
Fidelity Funds - Italy A Euro Standard 20/01/09 Italian
Fidelity Global Special Situations Superior 25/11/08 English
Fidelity Growth + Income Standard 22/08/08 English
Fidelity Income Plus Standard 17/09/08 English
Fidelity MoneyBuilder Global Standard 24/11/08 English
Fidelity UK Aggressive Standard 27/08/08 English
Fidelity WealthBuilder Standard 24/11/08 English
HSBC GIF Euroland Equity A Inc Standard 08/12/08 French
Investec Glb Eq A GBP Net Acc Superior 20/01/09 English
Investec Global Energy Superior 30/12/08 English
Investec GSF American Eq A Inc Grs USD Superior 25/11/08 English
JB EF US Value USD B Acc Standard 28/01/09 German
JOHCM Continental European GBP Inc Elite 16/12/08 English
JOHCM European Fund GBP Inc Elite 10/12/08 English
JOHCM Japan Fund GBP Inc Elite 03/12/08 English
Martin Currie GF North American USD Inc Superior 02/12/08 English
Martin Currie IF Japan A GBP Acc Standard 03/12/08 English
Martin Currie IF North American A Acc Superior 19/12/08 English
Martin Currie IF UK Equity Income A Inc Standard 16/12/08 English
Metzler European Growth Inc Standard 22/01/09 German
Newton Absolute Intrepid GBP Inc Superior 04/12/08 English
Newton American GBP Inc Standard 02/12/08 English
Newton Asian Income Superior 06/01/09 English
Newton Glob Hi Inc Inc Superior 25/11/08 English
Newton Income GBP Inc Superior 25/11/09 English
Newton International Growth Inc Superior 12/08/08 English
Newton Managed GBP Inc Superior 28/10/08 English
Newton Oriental Inc Superior 01/10/08 English
Newton Pan-European GBP Inc Standard 03/12/08 English
Old Mutual Ethical Fd A Acc Inferior 28/10/08 English
Old Mutual European Eq Acc Standard 28/10/08 English
Pictet F-Water Standard 28/10/08 German
Rathbone High Income Inc Standard 16/12/08 English
Rathbone Income Fund Inc Superior 17/11/08 English
Rensburg UK MicroCap Gr Tr Acc Standard 20/08/08 English
Rensburg UK Mid Cap Gr Inc Superior 11/08/08 English
Rensburg UK Sm Cos Inc Standard 14/08/08 English
Robeco Chinese Eq D EUR Acc Standard 01/12/08 English
Rolinco N.V. Inc Standard 23/01/09 English
Schroder UK Alpha Plus Inc Superior 18/12/08 English
Schroder UK Equity Fd Acc Superior 12/01/08 English
Standard Life European Eq Gr R Acc Standard 02/12/08 English
Standard Life UK Eq High Alpha R Acc Standard 28/10/08 English
Standard Life UK Equity Growth R Acc Superior 28/10/08 English
Standard Life UK Opportunities R Acc Standard 28/10/08 English
Standard Life UK Smaller Cos R Acc Elite 25/11/08 English
Threadneedle Asia Ret Net GBP Acc Standard 30/12/08 English

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Facebook Twitter LinkedIn
Font-Size

About Author

Christopher J. Traulsen, CFA  is director of fund research, Europe and Asia, Morningstar.

© Copyright 2024 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Modern Slavery Statement        Cookie Settings        Disclosures

The Morningstar Star Rating for Stocks is assigned based on an analyst's estimate of a stocks fair value. It is projection/opinion and not a statement of fact. Morningstar assigns star ratings based on an analyst’s estimate of a stock's fair value. Four components drive the Star Rating: (1) our assessment of the firm’s economic moat, (2) our estimate of the stock’s fair value, (3) our uncertainty around that fair value estimate and (4) the current market price. This process culminates in a single-point star rating that is updated daily. A 5-star represents a belief that the stock is a good value at its current price; a 1-star stock isn't. If our base-case assumptions are true the market price will converge on our fair value estimate over time, generally within three years. Investments in securities are subject to market and other risks. Past performance of a security may or may not be sustained in future and is no indication of future performance. For detail information about the Morningstar Star Rating for Stocks, please visit here

Quantitative Fair Value Estimate represents Morningstar’s estimate of the per share dollar amount that a company’s equity is worth today. The Quantitative Fair Value Estimate is based on a statistical model derived from the Fair Value Estimate Morningstar’s equity analysts assign to companies which includes a financial forecast of the company. The Quantitative Fair Value Estimate is calculated daily. It is a projection/opinion and not a statement of fact. Investments in securities are subject to market and other risks. Past performance of a security may or may not be sustained in future and is no indication of future performance. For detail information about the Quantiative Fair Value Estimate, please visit here

The Morningstar Medalist Rating is the summary expression of Morningstar’s forward-looking analysis of investment strategies as offered via specific vehicles using a rating scale of Gold, Silver, Bronze, Neutral, and Negative. 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. Investment products are evaluated on three key pillars (People, Parent, and Process) which, when coupled with a fee assessment, forms the basis for Morningstar’s conviction in those products’ investment merits and determines the Medalist Rating they’re assigned. Pillar ratings take the form of Low, Below Average, Average, Above Average, and High. Pillars may be evaluated via an analyst’s qualitative assessment (either directly to a vehicle the analyst covers or indirectly when the pillar ratings of a covered vehicle are mapped to a related uncovered vehicle) or using algorithmic techniques. Vehicles are sorted by their expected performance into rating groups defined by their Morningstar Category and their active or passive status. When analysts directly cover a vehicle, they assign the three pillar ratings based on their qualitative assessment, subject to the oversight of the Analyst Rating Committee, and monitor and reevaluate them at least every 14 months. When the vehicles are covered either indirectly by analysts or by algorithm, the ratings are assigned monthly. For more detailed information about these ratings, including their methodology, please go to here

The Morningstar Medalist Ratings are not statements of fact, nor are they credit or risk ratings. The Morningstar Medalist Rating (i) should not be used as the sole basis in evaluating an investment product, (ii) involves unknown risks and uncertainties which may cause expectations not to occur or to differ significantly from what was expected, (iii) are not guaranteed to be based on complete or accurate assumptions or models when determined algorithmically, (iv) involve the risk that the return target will not be met due to such things as unforeseen changes in changes in management, technology, economic development, interest rate development, operating and/or material costs, competitive pressure, supervisory law, exchange rate, tax rates, exchange rate changes, and/or changes in political and social conditions, and (v) should not be considered an offer or solicitation to buy or sell the investment product. A change in the fundamental factors underlying the Morningstar Medalist Rating can mean that the rating is subsequently no longer accurate.

For information on the historical Morningstar Medalist Rating for any managed investment Morningstar covers, please contact your local Morningstar office.

For more detailed information about conflicts of interest, including EU MAR disclosures, please see the “Morningstar Medalist Rating Analyst Conflict of Interest & Other Disclosures for EMEA”here

Select Your Site Edition To make sure the site is relevant to you, we need to know if you’re an individual investor or a financial professional.