Morningstar Upgrades Analyst Rating for Four U.S. Funds, Downgrades Six Funds in June

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 June, Morningstar analysts upgraded four U.S. fund ratings, downgraded six fund ratings, and assigned 10 new ratings. As of June 30, 2014, 156 U.S. funds had a Morningstar Analyst Rating of Gold, 294 funds had a Silver rating, 315 funds were rated Bronze, 348 funds had a Neutral rating, and 40 funds were rated Negative. Approximately 10 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, as of May 31, 2014.

Morningstar upgraded the following U.S. mutual funds in June:
• American Funds Tax-Exempt Bond Fund, upgraded to Bronze from Neutral 
• Goldman Sachs Small Cap Value, upgraded to Bronze from Neutral 
• JPMorgan Equity Income, upgraded to Silver from Bronze
• JPMorgan Mid Cap Value Fund, upgraded to Gold from Silver

Morningstar downgraded the following U.S. mutual funds in June:
• FPA Perennial, downgraded to Silver from Gold
• Invesco Charter Fund, downgraded to Neutral from Bronze 
• Invesco Mid Cap Core Equity Fund, downgraded to Neutral from Bronze 
• MainStay Large Cap Growth Fund, downgraded to Neutral from Bronze 
• Third Avenue Value, downgraded to Neutral from Bronze
• T. Rowe Price Equity Income Fund, downgraded to Bronze from Gold

Morningstar assigned new Analyst Ratings for the following U.S. mutual funds in June:
• DFA U.S. Core Equity I Fund—assigned new rating of Silver 
• Franklin Federal Tax-Free Income—assigned new rating of Silver
• Franklin NY Tax-Free Income—assigned new rating of Bronze
• Gotham Absolute Return Fund—assigned new rating of Bronze
• Invesco American Value Fund—assigned new rating of Bronze 
• Invesco Equally-Weighted SandP 500—assigned new rating of Neutral
• Invesco SmallCapValue—assigned new rating of Bronze
• Loomis Sayles Small Cap Value Fund—assigned new rating of Bronze 
• Neuberger Berman Absolute Return Multi-Manager Fund—assigned new rating of Neutral 
• PIMCO StocksPLUS Absolute Return Short Strategy—assigned new rating of 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 investor, and in Morningstar OfficeSM, a global practice and portfolio management solution for advisors.

Morningstar has about 110 manager research analysts worldwide who cover approximately 4,300 funds and exchange-traded funds (ETFs). The company provides data on approximately 160,200 open-end mutual funds, 7,400 closed-end funds, and 10,700 exchange-traded funds as of March 31, 2014.

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