Morningstar to Merge 2 Rating Systems

Morningstar makes forward-looking assessments of managed investments in two ways. Manager research analysts qualitatively assess managed investments they cover, leading to Gold, Silver, Bronze, Neutral or Negative analyst ratings. The service also uses algorithmic techniques to assess managed investments that analysts do not cover, generating Gold^Q, Silver^Q, Bronze^Q, Neutral^Q, and Negative^Q ratings.

By joining the Analyst Rating and Quantitative Rating under the Medalist Rating banner, Morningstar will shift to a common rating scale of Gold, Silver, Bronze, Neutral and Negative, without the superscript “Q” designation for ratings of quantitatively assessed managed assessments.

The Analyst Rating and Quantitative Rating methodologies will not change, and Morningstar doesn’t expect the systems shift to affect the ratings it assigns to managed investments. The company will continue to rely on three pillars — people, process and parent — to form the basis for the ratings.

To help investors distinguish between the pillars assessed by analysts and those assessed quantitatively, Morningstar will continue to apply the superscript “Q” designation to the underlying pillar ratings assigned quantitatively.