Introducing Morningstar Analyst Rating™ for ETFs

Morningstar to Enhance Ratings to Allow Better Comparisons Across Fund Types

Morningstar News Team 14 September, 2016 | 11:25
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Morningstar, Inc. announced its plans to apply the forward-looking Morningstar Analyst Rating™ to exchange-traded funds (ETFs) globally, allowing investors to more easily compare investments across fund types. With rollout anticipated later this year, Morningstar will initially assign Morningstar Analyst Ratings to approximately 300 ETFs, with coverage expected to expand over time.

“With ETFs increasingly used strategically to build investment portfolios globally and the range of ETF options continuing to grow, investors need help making informed decisions,” Ben Johnson, Morningstar’s director of global ETF research, said. “Assigning the qualitative Morningstar Analyst Rating to ETFs will help investors assess an ETF’s future prospects based on the fundamental research our analysts conduct. Our independent research and ratings, which we’ve been providing to investors for more than 30 years, will continue to aid due diligence efforts and serve investors’ best interests.”

The Morningstar Analyst Rating is a qualitative rating that signals Morningstar analysts’ conviction in a fund’s ability to outperform relevant peers, including both mutual funds and ETFs, on a risk-adjusted basis over a full market cycle. The Morningstar Analyst Rating follows a five-tiered scale: Gold, Silver, Bronze, Neutral, and Negative. Analysts arrive at a rating through an assessment of five key pillars: parent, people, performance, price, and process.

Johnson added, “We’ve been providing qualitative research and analyst reports on ETFs for more than eight years. Applying our globally consistent Morningstar Analyst Rating methodology to these mainly passive investments is a natural extension of our research process.”

Morningstar’s manager research analysts already publish qualitative ETF analyst reports for more than 650 ETFs worldwide.

 

About Morningstar, Inc.

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offers an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on nearly 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than $185 billion in assets under advisement and management as of June 30, 2016. The company has operations in 27 countries.

Analyst Ratings are subjective in nature and should not be used as the sole basis for investment decisions. Analyst Ratings are based on Morningstar analysts’ current expectations about future events and therefore involve unknown risks and uncertainties that may cause Morningstar’s expectations not to occur or to differ significantly from what was expected. Morningstar does not represent its Analyst Ratings to be guarantees nor should they be viewed as an assessment of a fund’s or the fund’s underlying securities’ creditworthiness. This press release is for informational purposes only.

 

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