How funds from PIMCO, T. Rowe Price, and Fidelity became Bronze medalists or Neutral-rated funds.
With more than 350 mutual funds rated and counting, the fund analysts and those of us on the ratings committees had a slew of interesting discussions about the merits of the funds we've rated. Many of the most fascinating have been around funds that we ended up with a Morningstar Analyst Rating of Neutral or Bronze.
Funds with middle-of-the-road ratings can have tremendous value, too. We tend to write a lot about the best and worst, but it's helpful to clarify exactly where the rest of the fund world stands. That's particularly true for some of the newer funds or those with newer managers.
So, here I'll unearth some highlights of our analyses on Bronze and Neutral funds, starting with the Bronze funds. For Bronze funds, the strengths outweigh the minuses, but there are drawbacks, to be sure. Neutral funds might have some big pluses and minuses that cancel each other out or it could be that you don't have much of either one to make the fund stand out in a positive or negative way.
To get the whole story, please click through to the analysis for each fund.
Since its debut in late 2008, PIMCO Unconstrained Bond
Morningstar analyst Eric Jacobson's description of the fund's process highlights its tremendous flexibility: "(Manager Chris Dialynas and the investment committee) determine interest-rate, yield-curve, currency, country, sector, and individual issue-level decisions. From an interest-rate perspective, Dialynas has broad freedom to work inside a duration range of negative 3.0 to 8.0 years. The fund can also invest up to maximum 40% in high yield and a maximum 50% in emerging markets; it will normally limit its investments in non-U.S. currency to 35%."
For index funds, tracking error and fees tell you a big piece of the story. In the case of the Bronze-rated Spartan U.S. Bond Index