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By Christine Benz and Russel Kinnel | 09-16-2015 02:00 PM

3 New Medalist Ratings for October

Vanguard High-Yield Corporate was upgraded to Silver, while Vanguard Global Minimum Volatility and Harbor Mid Cap Value both earned new Bronze ratings.

Christine Benz: Hi, I'm Christine Benz for Several mutual funds recently received new upgrades or new ratings altogether. Joining me to discuss a few of them is Russ Kinnel--he is editor of Morningstar FundInvestor.

Russ, thank you so much for being here.

Russ Kinnel: Good to be here.

Benz: In the October issue of Morningstar FundInvestor, you took a look at a few funds that had either received upgrades in their ratings or had gotten brand new medalist ratings. Let's talk about a couple of them. One is a fund that we've had under coverage for many, many years. This is Vanguard High-Yield Corporate (VWEHX). It recently was upgraded from Bronze to Silver. Let's talk about the factors driving that decision.

Kinnel: This is a fund whose manager, Michael Hong, been there since '08, and so part of our reasoning in upgrading was that we had a growing level of comfort. And over that time, the fund has really done well. As you know, it's one of those funds that's borderline between categories because it's at the high-quality end of high yield, which means it's almost all in BB and B. But it's actually done well relative to the junkier high-yield group as well as the higher-quality intermediate or corporate-bond groups. So, it's done well against a lot of groups. Its expense ratio is only 23 basis points, so it's super cheap. It's subadvised by Wellington. So, it's a very nice play; you could call it a chicken high-yield fund, but I think it's just a good, solid fund.

Benz: Has it had a little less volatility than other high-yield funds as well?

Kinnel: That's right. In years like '08 when credit risk gets punished, it typically loses a fair amount less. It's not that it won't lose anything; but because it's on the higher end of the low-quality area, it's going to lose less. And then, of course, the flip side is that in a year like '09 when the really junky stuff rallies, it's going to lag. But if you look at its track record, it does pretty well over the long haul.

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