What Is the Morningstar Medalist Rating?™
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What Is the Morningstar Medalist Rating?™
As of 2023, the Morningstar Analyst Rating and the Morningstar Quantitative Rating are now combined into a single, encompassing forward-looking rating, the Morningstar Medalist Rating.
Unlike the Morningstar Rating (or star rating), the Morningstar Medalist Rating™ is the summary expression of Morningstar’s forward-looking analysis of a fund. It picks up where commonly watched measures of the past leave off. The Medalist Rating is assigned by Morningstar’s manager research analyst covering the fund, based on the analyst’s conviction in the fund’s ability to outperform its peer group and/or relevant benchmark on a risk-adjusted basis over the long term.
Things To Know
- The Morningstar Rating supplements investors’ and advisors’ own work on funds and, along with written analysis, provides forward-looking perspective into a fund’s abilities.
- Funds with Gold, Silver, or Bronze ratings are rated more favorably by Morningstar over their peers across five qualitative pillars.
Morningstar analysts assign the ratings on a five-tier scale with three positive ratings of Gold, Silver, and Bronze, a Neutral rating, and a Negative rating.
If a fund receives a positive rating of Gold, Silver, or Bronze, it means Morningstar analysts think highly of the fund and expect it to outperform its peer group (and its benchmark if it’s an active strategy) over a full market cycle of at least five years, after fees.
The Medalist Rating is not a market call, and it is not meant to replace investors’ due-diligence process. It cannot assess whether a fund is the right fit for a particular portfolio and risk tolerance. It is intended to supplement investors’ and advisors’ own work on funds and, along with written analysis, provide Morningstar’s forward-looking perspective into a fund’s abilities.
Research methodology: the three pillars
Morningstar evaluates funds based on three key pillars—Process, People, and Parent. Its analysts believe funds that score highly in these areas are more likely to outperform over the long term on a risk-adjusted basis. Analysts assign a score of one to five to each pillar.
- Process: What is the fund’s strategy and does management have a competitive advantage enabling it to execute the process well and consistently over time?
- People: What is Morningstar’s assessment of the manager’s talent, tenure, and resources?
- Parent: What priorities prevail at the firm? Stewardship or salesmanship?
Analyst rating scale
- Gold: Best-of-breed fund that distinguishes itself across three pillars and has garnered the analysts’ highest level of conviction.
- Silver: Fund with advantages that outweigh the disadvantages across the three pillars and with sufficient level of analyst conviction to warrant a positive rating.
- Bronze: Fund with notable advantages across several, but perhaps not all, of the three pillars—strengths that give the analysts a high level of conviction.
- Neutral: Fund that isn’t likely to deliver standout returns but also isn’t likely to significantly underperform, according to the analysts.
- Negative: Fund that has at least one flaw likely to significantly hamper future performance and that is considered by analysts an inferior offering to its peers.