Morningstar Upgrades Analyst Rating for One U.S. Fund and One Target-Date Series, Downgrades Five Funds in February

CHICAGO, March 9, 2015 /PRNewswire/ -- Morningstar, Inc. (NASDAQ: MORN), a leading provider of independent investment research, has announced a summary of Morningstar Analyst Rating™ changes for U.S. funds that occurred in February 2015. The Morningstar Analyst Rating for funds represents Morningstar's conviction in the 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.

In February, Morningstar analysts upgraded one U.S. fund rating and one target-date series rating, downgraded five fund ratings, and assigned one new rating. In addition, two funds were placed Under Review. As of Feb. 28, 2015, 140 U.S. funds had a Morningstar Analyst Rating of Gold, 293 funds had a Silver rating, 335 funds were rated Bronze, 307 funds had a Neutral rating, and 38 funds were rated Negative. Approximately 10 percent of mutual funds available for sale in the United States are currently Morningstar Medalists. Morningstar's manager research team covers about $8 trillion of U.S. investor assets, which is equivalent to approximately 70 percent of total investor assets in the United States.

Morningstar upgraded the following U.S. mutual funds in February:

• BlackRock LifePath Index target-date series, upgraded to Silver from Bronze, for its solid mix of index-based strategies and attractive fees in addition to the firm's robust research effort.
• T. Rowe Price New America Growth, upgraded to Bronze from Neutral, now that manager Dan Martino, at the helm since May 2013, has proven himself running a diversified fund.

Morningstar downgraded the following U.S. mutual funds in February:

• Buffalo Mid Cap, downgraded to Neutral from Bronze, because of declining performance and manager changes.
• MFS Research International, downgraded to Bronze from Silver, because of muted potential for outperformance given the availability of stronger international-stock funds with more flexible mandates.
• Prudential Jennison Natural Resources, downgraded to Neutral from Bronze, because of underperformance over the last few years.
• Thornburg Developing World, downgraded to Neutral from Bronze, because of a manager departure.
• Vanguard Convertible Securities, downgraded to Bronze from Gold, because of the retirement of the fund's longtime manager.

Morningstar assigned a new rating to the following U.S. mutual fund in February:

• American Funds Developing World Growth and Income, assigned a Bronze rating because the firm has deep roots in emerging markets and the fund boasts experienced leaders and a sound strategy.

Morningstar placed the following U.S. mutual funds Under Review in February:

• American Funds Capital World Bond, placed Under Review because of manager departures and the potential effect of multiple transitions on the fund's portfolio and day-to-day execution.
• BlackRock Flexible Equity Investor, placed Under Review because of manager changes and potential changes to the fund's portfolio, coupled with performance that lagged the index and peers and above-average expenses.

A summary of last month's Morningstar Analyst Rating changes for U.S. mutual funds is available on Morningstar.com in the latest Fund Spy: Medalist Edition here.

Morningstar launched its Analyst Rating for funds and Global Fund Reports in November 2011. Morningstar Medalists—Gold-, Silver-, and Bronze-rated funds—are funds that analysts determine are likely to outperform their peer groups and/or relevant benchmarks on a risk-adjusted basis over a market cycle of at least five years. The differences between the positive Medalist ratings indicate the level of the analyst's conviction in a fund's future performance. Analysts arrive at a rating through an evaluation of five key pillars: People, Process, Parent, Performance, and Price. The Analyst Rating methodology is available here.

To view a complete list and supporting analysis for Analyst Ratings for U.S. funds, please visit www.morningstar.com. Premium Members have access to a Morningstar Medalists screener, where users can sort funds by Morningstar Rating, Morningstar Analyst Rating, Fund Family, Manager Tenure, Expense Ratio, and other metrics. Morningstar's Global Fund Reports, in-depth research reports that include a wealth of data and analysis, are available in Morningstar DirectSM, the company's web-based global investment analysis platform for institutional investors, and in Morningstar OfficeSM, a global practice and portfolio management solution for advisors.

Morningstar has approximately 100 manager research analysts worldwide who cover approximately 4,200 funds. The company provides data on approximately 183,500 open-end mutual funds, 9,700 closed-end funds, and 11,000 exchange-traded product listings as of Dec. 31, 2014.

About Morningstar, Inc.Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offers an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. Morningstar provides data on approximately 500,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 14 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $170 billion in assets under advisement and management as of Dec. 31, 2014. The company has operations in 27 countries.

Analyst Ratings are subjective in nature and should not be used as the sole basis for investment decisions. Analyst Ratings are based on Morningstar analysts' current expectations about future events and therefore involve unknown risks and uncertainties that may cause Morningstar's expectations not to occur or to differ significantly from what was expected. Morningstar does not represent its Analyst Ratings to be guarantees nor should they be viewed as an assessment of a fund's or the fund's underlying securities' creditworthiness. This press release is for informational purposes only; it should not be considered an offer or solicitation to buy or sell the mutual funds noted within. 

©2015 Morningstar, Inc. All rights reserved.

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Media Contact:Nadine Youssef, +1 312-696-6601 or [email protected]

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SOURCE Morningstar, Inc.