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Fund Spy

How the Analyst Ratings Could Change Under the New Approach to Assessing Funds

Downgrades would outnumber upgrades with costlier share classes likelier to take a hit.

Executive Summary
We recently announced our plans to update the methodology we follow in assigning Morningstar Analyst Ratings to mutual funds, exchange-traded funds, and other managed investments we cover. Here we examine the aggregate impact the methodology change would have if it were applied pro forma to U.S.-domiciled funds that have been assigned an Analyst Rating.

Study Approach
To analyze the potential impact of the ratings enhancement, we applied the updated methodology pro forma to funds and ETFs that have been assigned an Analyst Rating. We did so by taking the funds’ current People, Process, and Parent Pillar ratings and running them through the updated methodology. (For more information on the updated methodology is available here .)

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