Morningstar launched the Morningstar Analyst Rating for approximately 80 funds in China.
The Morningstar Analyst Rating for funds in China is a forward-looking analysis of a fund’s likelihood to outperform. To evaluate funds, Morningstar Analysts focus on five key pillars — Process, Performance, People, Parent, and Price—and then assign the fund a Morningstar Medallist rating of Gold, Silver, or Bronze. There are two additional ratings, Negative and Neutral.
A fund that receives a medallist ting of Gold (best-of-breed fund that distinguishes itself across the five pillars and has garnered the analysts’ highest level of conviction), Silver (fund with notable advantages across several, but perhaps not all, of the five pillars —strengths that give the analysts a high level of conviction), or Bronze (fund with advantages that outweigh any disadvantages across the five pillars and sufficient level of analyst conviction to warrant a positive rating) is expected to outperform similar funds over a full market cycle. These funds usually have sustainable advantages that position them well versus peers and/or a relevant benchmark on a risk-adjusted basis over a full market cycle of at least five years.
The Morningstar Analyst Rating supplements the Morningstar RatingTM for funds, commonly known as the “star rating,” which assigns 1 to 5 stars based on a fund’s past risk-adjusted returns versus category peers.
The Analyst Ratings are not designed to be a market call on an asset class or a prediction of short-term performance, but instead provide a forward-looking perspective on a fund’s abilities. Investors should consider these ratings a starting point from which to begin their research.
Investors should always invest in mutual funds that are appropriate to their risk tolerance, time horizon, and financial goals.
“The Morningstar Analyst Rating showcases our analysts’ opinions of the strengths and weaknesses of the funds we cover and helps investors identify funds our analysts think highly of and those we don’t,” said Rachel Wang, Morningstar’s director of manager research in China.
Morningstar is committed to expanding our analyst coverage for funds in China in order to empower investors to better assess funds using Morningstar Analyst Rating.
