Fund Spy

From Good to Gold

Russel Kinnel

How does a fund earn a Morningstar Analyst Rating of Gold? It isn't easy. The fund has to rate highly on nearly all five Pillars: People, Process, Price, Parent, and Performance. The road to earning a Gold rating usually lacks the obvious trigger of funds that we downgrade. Manager changes rarely lead to upgrades.

But that doesn't mean things aren't going on under the surface. You want your doctors, pilots, and dentists to be experienced, yet you probably can't point to the exact date when that happens. In our case, it's often a matter of seeing a manager through more environments. It's not just about performance; it's also about if these funds live up to their stated strategies. Some of this you can judge right away, but other aspects take some time.

Russel Kinnel has a position in the following securities mentioned above: PTTRX. Find out about Morningstar's editorial policies.