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Fund Spy: Morningstar Medalist Edition

A Flurry of Ratings in January 2019

We delve into five of the 99 strategies that were rated last month.

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In January 2019, Morningstar manager research analysts affirmed the Morningstar Analyst Ratings of 72 funds and eight target-date series; upgraded the ratings of five funds and one target-date series; downgraded the ratings of five funds; placed four funds’ ratings under review; and assigned new ratings to four funds. Below are some of January’s highlights, followed by the full list of ratings changes.

Upgrades
American Funds SMALLCAP World (SMCWX) added more research capability recently to help manage its whopping $40 billion asset base, raising the strategy's Morningstar Analyst Rating to Silver from Bronze. Three equity divisions, which espouse similar long-term-oriented investment philosophies but do not share investment ideas, now manage this strategy compared with the two teams it had in the past. This addition enhances diversification and invites different managers and analysts to play to their strengths. The strategy’s affinity to growth stocks and emerging markets won’t always work to its advantage, but it has prevailed over the long haul: The strategy outperformed the MSCI All-Country World Small Index in four of the six full market cycles since its 1994 inception.

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Shannon Yan does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.