Recent Morningstar Analyst Rating Upgrades and Downgrades

Manager changes, for good and ill, drove most significant Morningstar Analyst Rating changes in May and early June 2014.

Upgrades
 BlackRock Basic Value (MABAX) moved to Bronze from Neutral because new manager Bart Geer established that he can still produce the kind of results he did at  Putnam Equity Income (PEYAX) for more than 12 years. Indeed, Basic Value's cumulative return has beaten that of Geer's former fund 49% to 46% since the manager change in October 2012 through June 6, 2014. That's usually too short a time period to get a fund or manager off probation, but Geer brought a long track record and a proven process with him from Putnam.

Consistent execution of a straightforward, indexlike approach was enough to boost  Credit Suisse Commodity Real Return Strategy's (CRSAX) rating to Bronze from Neutral. The fund, which uses a slice of its assets to track its index via derivatives and puts the rest of its money in a bond portfolio, won't reap any extra gains from active commodity bets or higher-yielding collateral. That's because it doesn't do that sort of thing. It just tries to track a diversified basket of commodities--represented by the Dow Jones UBS Commodity Index--for a reasonable fee.

 Wells Fargo Advantage Municipal Bond isn't for everybody. It often dips into the mid- and low-quality municipal bonds. An experienced management team, however, and a willingness to rein in risk when warranted have helped this fund prove it can do well over time. Its rating moved to Silver from Bronze.

Downgrades
Manager changes and a change of venue for most of  Invesco Mid Cap Core Equity and  Invesco Charter's (CHTRX) analyst team cast doubt on the funds. Two of lead manager Ron Sloan's comanagers have left and most of the fund's analyst squad is moving from San Francisco to Atlanta, where new members will join. It's not yet clear what all this says about the future of the funds so their ratings dropped to Neutral from Bronze.

Manager changes also contributed to  MainStay Large Cap Growth's (MLAAX) downgrade to Neutral from Bronze. The fund's advisor, Winslow Capital Management, has seen a number of changes to its investment team in recent years. Comanager Bart Wear retired in mid-2013. Firm founder Clark Winslow has also been ramping down his day-to-day portfolio-management responsibilities in recent years, and he stepped down as the firm's chief investment officer in March 2013. Comanager Justin Kelly assumed that position and now acts as this fund's lead skipper. The firm also promoted former analyst Patrick Burton to comanager and hired two analysts last year, bringing its sector-focused analyst staff to six.    

Multiple levels of changes at  Litman Gregory Masters International (MSILX) led to its downgrade to Silver from Gold. Ken Gregory, who had helped select and monitor the managers for this subadvised fund for more than 15 years has left that role. Moreover, Amit Wadhwaney of Third Avenue, who has run a portion of this fund since 2005 using a strict value discipline, will give up his position on this fund's subadvisor roster on June 30, 2014, because he is leaving his firm. This comes on the heels of other subadvisor changes in recent years.

Role reversal caused  Matthews India's (MINDX) rating to drop to Bronze from Silver. In April 30, Sharat Shroff gave up his lead manager position and became a comanager, and Sunil Asnani was promoted from comanager to lead manager. Asnani has contributed to this fund's success over the years, but he has no prior track record as a lead manager.

Under Review
 FPA Perennial ,  Waddell & Reed Asset Strategy (UNASX), and Ivy Asset Strategy's (WASCX) ratings are Under Review due to manager changes. Longtime comanager Steven Geist announced his retirement at FPA Perennial, leaving Eric Ende, who is nearing retirement himself, and Greg Herr, who became a comanager in 2013, in charge.  Waddell & Reed Financial , advisor to Waddell & Reed Asset Strategy and its Ivy clone, has said comanager Ryan Caldwell will step down June 15, 2014. Caldwell's departure is a loss. He has played an integral role in the funds' day-to-day activities since joining the team in 2005 and has been a key contributor to their attractive long-term results.

New Ratings
A handful of funds were rated for the first time. Three got Neutrals, three Bronze, and one Silver. Among the new Neutrals,  Forward Tactical Growth (FTGOX) hasn't been tested over a full market cycle as a mutual fund and relies on the manager's market-timing skills; and  Schwab Dividend Equity (SWDSX) and Core Equity's (SWANX) management team has seen considerable changes in the past two years. The Bronze-rated  AMG Managers Skyline Special Equities (SKSEX),  Becker Value Equity (BVEFX), and  Hennessy Focus (HFCSX) each follow distinctive strategies that could set them apart from their respective peers and benchmarks. And  Loomis Sayles Small Cap Growth (LSSIX) earned a Silver rating the first time out for its two long-tenured and shareholder-oriented managers, sound process, and stellar results.