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Ratings Upgrades and Downgrades for U.S. Target-Date Series

An updated ratings methodology brings a few notable changes.

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Target-date series have steadily become a popular retirement savings strategy for Americans during the last decade. At the end of 2015, assets in target-date mutual funds stood at $763 billion, up from $703 billion the year prior. Morningstar has rated these thriving strategies since 2009, and our most recent quarterly review of those Analyst Ratings produced a few notable changes. 

Some of the ratings changes stem from an update we've made to how we rate target-date series. Details behind the methodology update and Morningstar's current target-date series methodology paper can be found in the Research Library on Morningstar's corporate website. To summarize: Previously, a series' Performance and Price Pillar ratings and half of its Process Pillar score were set by a quantitative formula. Now, analysts qualitatively determine all aspects of the ratings, which also include the People and Parent Pillars, as well as the overall Morningstar Analyst Rating. Of course, quantitative considerations continue to remain important inputs to many aspects of the pillar and overall ratings.

Janet Yang, CFA has a position in the following securities mentioned above: TRRKX. Find out about Morningstar’s editorial policies.