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Morningstar Risk™

What is Morningstar Risk™?

Morningstar Risk is an annualized measure of a fund’s downside return volatility, or how often the fund has dipped below its average returns over a period.

Investors can use Morningstar Risk to gauge the amount of risk they are taking on when they invest in a fund.

Morningstar Risk is the difference between Morningstar Return (which adjusts for the risk-free rate) and the Morningstar Risk-Adjusted Return (which adjusts for the risk-free rate and the typical investor’s risk tolerance, or how they assess the trade-off between risk and return). Morningstar Risk is always greater than or equal to zero, and a higher number indicates higher risk.