# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Current Investment Style

For equity funds, this section lists a fund portfolio’s current averages for various portfolio statistics, including price/earnings, price/cash flow, and historical earnings growth.

To provide perspective, we compare these measures with the funds’ category average. For bond funds, this section lists a portfolio’s current duration, as well as averages for effective maturity, credit quality, weighted coupon, and price. These numbers are helpful in determining how much interest-rate and credit risk the portfolio currently has.

For example, funds with high durations typically are very sensitive to changes in interest rates, whereas those with durations of just a year or two tend to be relatively insensitive to interest-rate changes. Funds with AAA or AA average credit-quality rankings take on less credit risk than those with, for example, B ratings, which indicate the portfolio holds a lot of high-yield (or junk) debt. Morningstar currently uses price/cash flow, price/book, and median market cap to categorize foreign funds. This section also compares international-stock funds’ current valuations with those of the MSCI EAFE

Index, which is the most widely used benchmark for international offerings. Funds with low valuations typically hold stocks that aren’t expected to grow rapidly, and therefore land in one of the value style boxes. By contrast, portfolios with high valuations typically hold fast-growing issues.

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