Fund Spy: Morningstar Medalist Edition

Ratings Highlights for October

Zachary Patzik, CFA

In October, Morningstar manager research analysts affirmed the Morningstar Analyst Ratings of 140 strategies. Additionally, six ratings were upgraded, while 13 ratings were downgraded. Only one fund was placed under review. A select group of ratings is showcased below, followed by the full list of ratings changes for the month. 

Upgrades
 BlackRock High Yield Municipal's (MAYHX) strong team, cheap fees, and improved investment framework prompted an upgrade of its Analyst Rating to Silver from Bronze. Managers Ted Jaeckel and Walter O'Connor are supported by a large team that includes more than 40 members--17 of whom are sector- and regional-focused muni analysts. This team has historically courted risk through a larger tobacco stake than peers and an overweighting to bonds with long maturities, which have led to above-average volatility over the past several years. To mitigate such risks, the team shortened the fund's duration after the 2013 taper tantrum and has since managed yield spikes more effectively. The team has also reduced exposure to troubled Puerto Rico and nonrated bonds that have hurt some rivals.

Zachary Patzik, CFA does not own shares in any of the securities mentioned above. Find out about Morningstar's editorial policies.