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Mary KenefakeMary.Kenefake@morningstar.com
Morningstar Upgrades Analyst Rating for Five U.S. Funds; Downgrades Seven Funds; Assigns New Ratings to 14 Funds in December

CHICAGO, Jan. 9, 2017—Morningstar, Inc. (NASDAQ: MORN), a leading provider of independent investment research, has published a summary of Morningstar Analyst Rating™ activity for 84 U.S. mutual funds and exchange-traded funds (ETFs) as well as two target-date series that occurred in December 2016. 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 December, Morningstar manager research analysts upgraded five U.S. funds and downgraded ratings for seven funds. In addition, analysts affirmed ratings for 55 funds and two target-date series, assigned 14 new fund ratings, and placed three funds under review.

As of Dec. 31, 2016, Morningstar analysts had assigned a Morningstar Analyst Rating of Gold to 133 unique U.S. funds, a Silver rating to 283 funds, a Bronze rating to 486 funds, a Neutral rating to 391 funds, and a Negative rating to 10 funds. Morningstar Medalists currently account for approximately 9 percent of unique mutual funds available for sale in the United States and 59 percent of assets under management. Morningstar’s manager research analysts rate more than $11 trillion of U.S. investor assets, or approximately 67 percent of total investor assets in the United States.

The following Morningstar Analyst Rating changes occurred in December 2016:

Fund / Previous Morningstar Analyst Rating / Current Morningstar Analyst Rating
Upgrades

AQR Style Premia Alternative / Bronze / Silver
Dreyfus/Standish Global Fixed Income / Neutral / Bronze
PIMCO Foreign Bond (USD-Hedged) / Bronze / Silver
PIMCO Global Bond (USD-Hedged) / Bronze / Silver
Vanguard Energy / Neutral / Bronze

Downgrades
Berwyn / Silver / Bronze
Diamond Hill Small Cap / Gold / Silver
Fidelity OTC / Bronze / Neutral
Hennessy Focus / Bronze / Neutral
Invesco Small Cap Growth / Silver / Bronze
John Hancock Balanced / Bronze / Neutral
Wells Fargo Growth / Bronze / Neutral

New Ratings
American Century Intermediate Term Tax-Free Bond / None / Neutral
Causeway Global Value / None / Silver
First Trust Large Cap Value AlphaDEX ETF / None / Neutral
FlexShares iBoxx 3Yr Target Duration TIPS ETF / None / Bronze
Gabelli ABC / None / Neutral
Goldman Sachs International Small Cap Insights / None / Neutral
Invesco Global Core Equity / None / Neutral
iShares TIPS Bond / None / Silver
PIMCO 1-5 Year US TIPS ETF / None / Bronze
PowerShares FTSE RAFI Developed Markets ex-US ETF / None / Bronze
PowerShares Fundamental High Yield Corporate Bond ETF / None / Neutral
Schwab US TIPS ETF / None / Silver
SPDR Bloomberg Barclays TIPS ETF / None / Silver
Vanguard Short-Term Inflation-Protected Securities ETF/ None / Gold

Under Review
Pioneer / Neutral / Under Review
Pioneer Equity Income / Neutral / Under Review
Pioneer Strategic Income / Bronze / Under Review

A list of the Analyst Ratings for 55 U.S. funds and two target-date series that Morningstar affirmed in December is available here.

A summary of last month’s Morningstar Analyst Rating changes for U.S. 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 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 for mutual funds is available here and for ETFs 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 120 manager research analysts worldwide who cover approximately 3,860 funds. The company provides data on approximately 209,300 open-end mutual funds, 10,100 closed-end funds, and 13,900 exchange-traded product listings as of Sept. 30, 2016.

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 nearly 540,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on approximately 18.5 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, with more than $200 billion in assets under advisement and management as of Sept. 30, 2016. 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.

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©2017 Morningstar, Inc. All rights reserved.


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