Bringing ETF and Mutual Funds Ratings Together
A refresh to the two most important signals Morningstar sends to investors should help guide investment in their investment selection process.
Ben Johnson: For the first time, we'll be including exchange-traded funds in the Morningstar Analyst Rating framework. We are better aligning the signal that we're sending to investors to guide them in their fund-selection process with the way in which they're framing their own decisions.
Our positive ratings are reserved for those funds that we expect to outperform their category peers while accounting for risk over the course of a full market cycle. Funds with a rating of Neutral are funds that we don't necessarily have a particularly strong positive view on, nor do we think that they are in any way fundamentally impaired. A Negative rating would be reserved for those funds that we believe are in some way fundamentally impaired or encumbered relative to their peers.