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Fund Spy: Morningstar Medalist Edition

September Ratings Activity Includes 5 New Morningstar Medalists

But there were also six downgrades, including three to Neutral.

Mentioned: , , , , , , , , ,

Morningstar Manager Research analysts upgraded the Morningstar Analyst Ratings of four funds in September and downgraded six. We also initiated coverage on six funds, including four that are part of the Principal SAM target-risk series. (Those funds are now rated Neutral, in line with the fifth fund in the series,  Principal SAM Balanced (SABPX).) Some notable changes are highlighted here; a complete list can be found in the table below.

Upgrades
 Fidelity Diversified International (FDIVX) owes it upgrade to Bronze from Neutral to its longtime manager, reasonable expenses, and improving prospects. Bill Bower has run the fund since 2001, following stints at other Fidelity international funds. He did well out of the gates, but surging assets in the mid-2000s coincided with a stretch of mediocre performance and an increasing focus on liquid large-cap stocks over the small- and mid-cap fare that was more prominent early in his tenure. Another question was how Bower would adapt to a change in analytical resources; Fidelity built its own international analyst team from scratch a few years ago in anticipation of a 2013 split from an affiliate company. Now assets have shrunk to a more reasonable size following several years of outflows, and performance has been on the upswing, bolstering the fund's long-term record, which is quite competitive versus peers and the benchmark since Bower's 2001 start. Attribution points to good stock-picking across most sectors during that period, suggesting the new crop of analysts is working out well. (Note that this upgrade also applies to  Fidelity Advisor Diversified International (FDVAX), which is run by the same manager using the same strategy.)

Laura Lallos has a position in the following securities mentioned above: AAPL, GE. Find out about Morningstar’s editorial policies.

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