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How does your passive fund stack up in Morningstar’s new ratings service?

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Written by:
04/12/2013
Morningstar has launched qualitative research and ratings for passive funds for the first time but how have your picks fared?
How does your passive fund stack up in Morningstar’s new ratings service?

The detailed ratings system draws from the company’s global fund research methodology used by Morningstar fund analysts worldwide.

It considers five key pillars -people (the manager and supporting research team), the investment process, the parent group, performance, and fees.

In addition, passive funds are scrutinised for their benchmark tracking accuracy.

In its first ever release, it has named 23 funds as Morningstar Medalists, out fo the 25 it analysed.

Of these, nine received a Morningstar Analyst Rating of Silver and 14 were Bronze; none received a Gold rating.

The rating scale mirrors that used by Morningstar analysts for their research and ratings of open-end and closed-end funds, with the categories listed below.

Gold: Best-of-breed fund that distinguishes itself across the five pillars and has garnered the analysts’ highest level of conviction;

Silver: Fund with notable advantages across several, but perhaps not all, of the five pillars-strengths that give the analysts a high level of conviction;

Bronze: Fund with advantages that outweigh any disadvantages across the five pillars, and sufficient level of analyst conviction to warrant a positive rating;

Neutral: Fund that isn’t likely to deliver standout returns, but also isn’t likely to significantly underperform; and

Negative: Fund that has at least one flaw likely to significantly hamper future performance, and is considered an inferior offering to its peers.

So how did your tracker do? Below, we reveal the first list of rated funds:

BlackRock Japan Equity Tkr D Acc Bronze
BlackRock Corporate Bond Tkr D Acc Bronze
BlackRock North Amer Eq Tkr D Acc Bronze
BlackRock Overseas Corp Bd Tkr D Acc Bronze
BlackRock Overseas Govt Bd Tracker D Acc Neutral
BlackRock Pacific Ex Japan Eq Tkr D Acc Bronze
BlackRock UK Equity Tracker D Acc Bronze
BlackRock UK Gilts All Stocks Tkr D Acc Bronze
HSBC American Index Retail Acc Silver
HSBC FTSE 100 Index Retail Acc Neutral
L&G All Stocks Idx Linked Gilt Idx I Acc Bronze
L&G Pacific Index I Inc Silver
L&G UK Index Trust I Bronze
Vanguard Emerging Market Stock Idx Inv Acc Bronze
Vanguard EUR Gov Bond Index Inv EUR Silver
Vanguard FTSE Dev Wld ex UK Eq Idx Acc Silver
Vanguard FTSE U.K. Equity Index Acc Silver
Vanguard Global Bd Idx GBP Hdg Acc Bronze
Vanguard Global Stock Idx Inst USD Bronze
Vanguard Japan Stock Idx Inst USD Acc Silver
Vanguard Pacific Ex-Jap Stk Idx Inst USD Silver
Vanguard U.K. Government Bd Idx GBP Acc Silver
Vanguard UK Inv Grade Bd Idx GBP Bronze
Vanguard US 500 Stock Index Ins USD Silver
Vanguard US Inv Gr Crdt Idx Inst USD Bronze

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