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Fund Spy: Morningstar Medalist Edition

April Activity Features a Storm of New Fund Analyst Ratings

New ratings rule the month.

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In April, Morningstar Manager Research analysts upgraded the Morningstar Analyst Ratings of six mutual funds and one exchange-traded fund, downgraded nine mutual funds and one exchange-traded fund, affirmed ratings on 52 mutual funds, three target-date series, one target-risk series, and two ETFs, assigned new ratings to 25 mutual funds, one target-risk series, and five ETFs, and placed one target-date series under review. Below are some of April’s highlights, followed by the full list of ratings changes. 

Upgrades
 Ariel International (AINIX) was upgraded to Bronze from Neutral thanks to its solid risk-adjusted returns and prudent risk management approach. Portfolio manager Rupal Bhansali, who has led this fund since its December 2011 inception, places a heavy emphasis on businesses with strong franchises and sustainably high returns on capital. Bhansali seeks high-quality holdings, and as of December 2016, the  fund had the highest average return on assets and lowest debt/capital metrics in the foreign large-value Morningstar Category. Bhansali shows conviction versus the fund’s MSCI EAFE Index benchmark, with big overweightings in technology and telecom as of March 2017. The fund also hedges currency exposure at times, and its cash stake has drifted as high as 20%. Ariel cut fees by 12 basis points in November 2016, making the fund more cost-competitive.

Christopher Franz does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

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