Morningstar Upgrades Analyst Rating for One U.S. Fund, Downgrades 20 Funds in October

Chicago, IL - 10 November 2014

Morningstar, Inc. (NASDAQ: MORN), a leading provider of independent investment research, today announced Morningstar Analyst Rating™ changes for several U.S. funds. The Morningstar Analyst Rating for funds represents Morningstar's conviction in the fund's ability to outperform on a risk-adjusted basis over the long term. The five-tiered, qualitative Morningstar Analyst Rating scale has three positive levels, indicating Morningstar Medalists—Gold, Silver, and Bronze—in addition to Neutral and Negative ratings.

In October, Morningstar analysts upgraded one U.S. fund rating, downgraded 20 fund ratings, and placed two funds Under Review. Last month, Morningstar announced its analysts had reaffirmed, upgraded, or downgraded Analyst Ratings for 10 PIMCO funds as of Oct. 10. The full summary of October's Analyst Rating changes for U.S. mutual funds, including PIMCO funds, is below.

As of Oct. 31, 2014, 142 U.S. funds had a Morningstar Analyst Rating of Gold, 298 funds had a Silver rating, 360 funds were rated Bronze, 321 funds had a Neutral rating, and 39 funds were rated Negative. Approximately 7 percent of mutual funds available for sale in the United States are currently Morningstar Medalists. Morningstar's manager research team covers about $8 trillion of U.S. investor assets, which is equivalent to approximately 70 percent of total investor assets in the United States.

Morningstar upgraded the following U.S. mutual fund in October:

  • PIMCO Municipal Bond, upgraded to Bronze from Neutral

Morningstar downgraded the following U.S. mutual funds in October:

  • Baron Opportunity, downgraded to Neutral from Bronze
  • First Eagle Overseas, downgraded to Bronze from Silver
  • First Eagle U.S. Value, downgraded to Bronze from Silver
  • Harbor Commodity Real Return Strategy, downgraded to Silver from Gold
  • Harbor Real Return, downgraded to Silver from Gold
  • MFS® New Discovery, downgraded to Neutral from Bronze
  • PIMCO Commodity Real Return Strategy, downgraded to Silver from Gold
  • PIMCO Corporate and Income Opportunities, downgraded to Neutral from Bronze
  • PIMCO Emerging Local Bond, downgraded to Silver from Gold
  • PIMCO Emerging Markets Bond, downgraded to Silver from Gold
  • PIMCO Emerging Markets Currency, downgraded to Neutral from Silver
  • PIMCO Foreign Bond (Unhedged), downgraded to Bronze from Silver
  • PIMCO Foreign Bond (USD-Hedged), downgraded to Bronze from Silver
  • PIMCO Global Bond (Unhedged), downgraded to Bronze from Silver
  • PIMCO Global Bond (USD-Hedged), downgraded to Bronze from Silver
  • PIMCO Inflation Response Multi-Asset, downgraded to Neutral from Silver
  • PIMCO Long Duration Total Return, downgraded to Bronze from Silver
  • PIMCO Low Duration, downgraded to Bronze from Gold
  • PIMCO Real Return, downgraded to Silver from Gold
  • Vanguard Short-Term Federal, downgraded to Silver from Gold

Morningstar placed the following U.S. mutual funds Under Review in October:

  • Janus Global Research—previously rated Bronze
  • Janus Research—previously rated Neutral

A summary of last month's Morningstar Analyst Rating changes for U.S. mutual funds is available on Morningstar.com in the latest Fund Spy: Medalist Edition here.

Morningstar launched its Analyst Rating for funds and Global Fund Reports in November 2011. Morningstar Medalists—Gold-, Silver-, and Bronze-rated funds—are funds that analysts determine are likely to outperform their peer groups and/or relevant benchmarks on a risk-adjusted basis over a market cycle of at least five years. The differences between the positive Medalist ratings indicate the level of the analyst's conviction in a fund's future performance. Analysts arrive at a rating through an evaluation of five key pillars: People, Process, Parent, Performance, and Price. The Analyst Rating methodology is available here.

To view a complete list and supporting analysis for Analyst Ratings for U.S. funds, please visit www.morningstar.com. Premium Members have access to a Morningstar Medalists screener, where users can sort funds by Morningstar Rating, Morningstar Analyst Rating, Fund Family, Manager Tenure, Expense Ratio, and other metrics. Morningstar's Global Fund Reports, in-depth research reports that include a wealth of data and analysis, are available in Morningstar DirectSM, the company's web-based global investment analysis platform for institutional investors, and in Morningstar OfficeSM, a global practice and portfolio management solution for advisors.

Morningstar has approximately 100 manager research analysts worldwide who cover approximately 4,300 funds. The company provides data on approximately 175,000 open-end mutual funds, 9,700 closed-end funds, and 11,000 exchange-traded product listings as of Sept. 30, 2014.

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