Medalist Rating (Parent)

The Parent Pillar covers the priorities that prevail at the firm, including stewardship and salesmanship.

Morningstar believes the parent organization is important in evaluating both active and passive funds. Although other factors may have more immediate impact, they would not be durable without backing from the asset-management firm. Further, the asset manager and its management set the tone for key elements of our evaluation, including capacity management, risk management, recruitment and retention of talent, and firm-wide policies, such as incentive pay, which drive or impede the alignment of the firm's interests with those of fund investors.

Beyond these operational areas, Morningstar analysts prefer firms that have a culture of stewardship and put investors first to those that are too heavily weighted to salesmanship. Although relatively few firms fall obviously at one extreme or another, determining where an asset manager falls on the spectrum is a key part of the Parent research approach. Key areas of evaluation include recruitment and retention of talent, organizational structure, capacity management, organizational and business strategy, quality of product lineup, alignment of interests with investors, regulatory compliance, and investment/group culture.