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  • Market Risk

    Market risk is the chance that an entire group of investments, like European stocks, will lose value (as opposed to one particular stock falling in price). Market risk is a danger because there is always the chance you’ll have to sell an investment when the market is down.

  • Morningstar Analyst Rating for Funds

    The Morningstar Analyst Rating expresses the opinion of Morningstar's forward-looking analysis of a fund within the sector of equal funds.

    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. The Morningstar Analyst Rating is 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. If a fund receives a positive rating of Gold, Silver, or Bronze, it means Morningstar analysts expect the fund to outperform over a full market cycle of at least five years.

    The Morningstar Analyst Rating is not a market call It is intended to supplement investors' and advisors' own work on funds.

    Research Methodology: The Five Pillars

    Morningstar evaluates funds based on five key pillars--Process, Performance, People, Parent, and Price--which its analysts believe lead to funds that are more likely to outperform over the long term on a risk-adjusted basis. Analysts assign a rating of Positive, Neutral, or Negative 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?

    Performance: Is the fund's performance pattern logical given its process? Has the fund earned its keep with strong risk-adjusted returns over relevant time periods?

    People: What is Morningstar's assessment of the manager's talent, tenure, and available resources?

    Parent: What priorities prevail at the firm? Stewardship or salesmanship?

    Does the fund offer an attractive value proposition (price and costs) compared with similar funds that are sold through similar channels?

  • Morningstar Category for equity funds

    Funds are grouped into categories by Morningstar according to their actual investment style, not merely their stated investment objectives, nor their ability to generate a certain level of income. To ensure homogeneous groupings, Morningstar normally allocates funds to categories on the basis of their portfolio holdings. 

    1. Equity funds with focus on European countries

    Austria Equity
    Austria Equity funds invest primarily in the equities of companies based in Austria. These funds invest at least 75% of their portfolio in equities and at least 75% of these are invested in Austrian equities.
    Morningstar Category Index: MSCI Austria NDTR

    Belgium Equity
    Belgium Equity funds invest primarily in the equities of companies based in Belgium. 
    These funds invest at least 75% of their portfolio in equities and at least 75% of these are invested in Belgian equities.
    Morningstar Category Index: MSCI Belgium NDTR

    Denmark Equity
    Denmark Equity funds invest primarily in Danish companies. These funds invest at least 75% of their portfolio in equities and at least 75% of these are invested in Danish equities.
    Morningstar Category Index: MSCI Denmark NDTR

    Equities from Eurozone countries
    Eurozone Single Country Equity funds invest primarily in the equities of companies based in Eurozone countries for which there are no distinct Morningstar categories (such countries have too few funds to support a distinct category). Currently, there are only two countries for which this is the case: Greece and Portugal. These funds invest at least 75% of their portfolio in equities and at least 75% of these are invested in Greek or Portuguese equities..
    Morningstar Category Index: MSCI EMU NDTR

    Finland Equity
    Finland Equity funds invest primarily in the equities of companies based in Finland. These funds invest at least 75% of their portfolio in equities and at least 75% of these are invested in Finish equities.
    Morningstar Category Index: MSCI Finland NDTR

    France Large-Cap Equity
    France Large-Cap Equity funds invest primarily in the equities of large-cap French companies. Equities in the top 70% of the European equity market (including the UK) are defined as large-cap. 
    These funds invest at least 75% of their portfolio in equities and at least 75% of these are invested in French equities.
    Morningstar Category Index: MSCI France NDTR

    France Small/Mid-Cap Equity
    France Small/Mid-Cap Equity funds invest primarily in the equities of small-cap and mid-cap French companies. Their holdings typically fall in the bottom 30% of the capitalisation of the European equity market (including the UK). These funds invest at least 75% of their portfolio in equities and at least 75% of these are invested in French equities.
    Morningstar Category Index: MSCI France Sm-Cap NDTR

    Germany Large-Cap Equity
    Germany Large-Cap Equity funds invest primarily in the equities of large-cap German companies. Equities in the top 70% of the European equity market (including the UK) are defined as large-cap. 
    These funds invest at least 75% of their portfolio in equities and at least 75% of these are invested in German equities.
    Morningstar Category Index: MSCI Germany NDTR

    Germany Small/Mid-Cap Equity
    Germany Small/Mid-Cap Equity funds invest primarily in the equities of small-cap and madcap German companies. Their holdings typically fall in the bottom 30% of the capitalization of the European equity market (including the UK). These funds invest at least 75% of their portfolio in equities and at least 75% of these are invested in German equities.
    Morningstar Category Index: MSCI Germany Sm-Cap NDTR

    Italy Equity
    Italy Equity funds invest primarily in the equities of companies based in Italy. These funds invest at least 75% of their portfolio in equities and at least 75% of these are invested in Italian equities.
    Morningstar Category Index: MSCI Italy NDTR

    Netherlands Equity
    Netherlands Equity funds invest primarily in the equities of companies based in the Netherlands. 
    These funds invest at least 75% of their portfolio in equities and at least 75% of these are invested in Dutch equities.
    Morningstar Category Index: MSCI Netherlands NDTR

    Norway Equity
    Norway Equity funds invest primarily in Norwegian companies. These funds invest at least 75% of their portfolio in equities and at least 75% of these are invested in Norwegian equities.
    Morningstar Category Index: Mutual Fund Index Linked / TOTX

    Russia Equity
    Russia Equity funds invest primarily in the equities of companies based in Russia. These funds invest at least 75% of their portfolio in equities and at least 75% of these are invested in Russian equities.
    Morningstar Category Index: MSCI Russia NDTR

    Spain Equity
    Spain Equity funds invest primarily in the equities of companies based in Spain. These funds invest at least 75% of their portfolio in equities and at least 75% of these are invested in Spanish equities.
    Morningstar Category Index: MSCI Spain NDTR

    Sweden Large-Cap Equity
    Sweden Large-Cap Equity funds invest primarily in the equities of large-cap Swedish companies. Equities in the top 70% of the capitalisation of the European equity market (including the UK) are defined as large-cap. These funds invest at least 75% of their portfolio in equities and at least 75% of these are invested in Swedish equities.
    Morningstar Category Index: MSCI Sweden NDTR

    Sweden Small/Mid-Cap Equity
    Swedish Small/Mid-Cap Equity funds invest primarily in the equities of small-cap and madcap Swedish companies. Their holdings typically fall in the bottom 30% of the capitalization of the European equity market (including the UK). These funds invest at least 75% of their portfolio in equities and at least 75% of these are invested in Swedish equities.
    Morningstar Category Index: MSCI Sweden Small Cap NDTR

    Sweden/Global Equity
    Sweden/Global Equity funds invest globally in equities but have a large position in Swedish equities. Typically funds in this category have between 30 and 75% of total assets invested in Swedish equities. These funds invest between 30% and 75% of their portfolio in Swedish equities.
    Morningstar Category Index: 50% MSCI The World Index Free NDTR, 50% MSCI Sweden NDTR

    Switzerland Large-Cap Equity
    Switzerland Large-Cap Equity funds invest primarily in the equities of large-cap Swiss companies. Equities in the top 70% of the European equity market (including the UK) are defined as large-cap. These funds invest at least 75% of their portfolio in equities and at least 75% of these are invested in Swiss equities.
    Morningstar Category Index: MSCI Switzerland NDTR

    Switzerland Small/Mid-Cap Equity
    Switzerland Small/Mid-Cap Equity funds invest primarily in the equities of small-cap and mid-cap Swiss companies. Their holdings typically fall in the bottom 30% of the capitalisation of the European equity market (including the UK). These funds invest at least 75% of their portfolio in equities and at least 75% of these are invested in Swiss equities.
    Morningstar Category Index: MSCI Switzerland Sm-Cap NDTR

    UK Large-Cap Blend Equity
    UK Large-Cap Blend Equity funds are fairly representative of the overall UK equity market in size, growth rates and price. Equities in the top 70% of the European equity market (including the UK) are defined as large-cap. The blend style is assigned to funds where neither growth nor value characteristics predominate. These funds tend to invest across the spectrum of UK industries. These funds invest at least 75% of their portfolio in equities and at least 75% of these are invested in UK equities..
    Morningstar Category Index: FTSE 100

    UK Large-Cap Growth Equity
    UK Large-Cap Growth Equity funds invest primarily in the equities of large-cap UK companies that are more expensive or projected to grow faster than other large caps in Europe (including the UK). Equities in the top 70% of the capitalisation of the European equity market (including the UK) are defined as large-cap. Growth is defined based on fast growth (high growth rates for earnings, sales, book value, and cash flow) and high valuations (high price ratios and low dividend yields). Most of these funds focus on companies in rapidly expanding industries. These funds invest at least 75% of their portfolio in equities and at least 75% of these are invested in UK equities..
    Morningstar Category Index: MSCI United Kingdom Growth NDTR

    UK Large-Cap Value Equity
    UK Large-Cap Value Equity funds invest primarily in the equities of large-cap UK companies that are less expensive or growing more slowly than other large-caps in Europe (including the UK). Shares in the top 70% of the capitalisation of the European equity market (including the UK) are defined as large-cap. Value is defined based on low valuations (low price ratios and high dividend yields) and slow growth (low growth rates for earnings, sales, book value, and cash flow). These funds invest at least 75% of their portfolio in equities and at least 75% of these are invested in UK equities..
    Morningstar Category Index: MSCI United Kingdom Value NDTR

    UK Mid-Cap Equity
    Some UK Mid-Cap Equity funds invest in equities of all sizes, thus leading to a mid-cap profile, but others focus on mid-cap companies. The European mid-cap range represents the 20% of the European equity market (including the UK) that falls between small caps (the bottom 10% of capitalisation) and large caps (the top 70% of capitalisation). These funds invest at least 75% of their portfolio in equities and at least 75% of these are invested in UK equities..
    Morningstar Category Index: FTSE 250 Ex Inv

    UK Small-Cap Equity
    UK Small-Cap Equity funds invest primarily in the equities of small-cap UK companies. Equities in the bottom 10% of the European equity market (including the UK) are defined as small-cap. At least 75% of the portfolio is invested in equities and at least 75% of these are invested in UK equities..

    2. Equity funds with a focus on Europe as a region

    Emerging Europe Equity
    Emerging Europe Equity funds invest primarily in the equities of companies based in Emerging Europe. These funds invest at least 75% of their portfolio in equities, and at least 75% of these in Emerging Europe equities.
    Morningstar Category Index: MSCI EM Eastern Europe ND

    Emerging Europe ex-Russia Equity
    Emerging Europe ex-Russia Equity funds invest primarily in the equities of companies based in Emerging Europe, excluding Russia. These funds invest at least 75% of their portfolio in equities, and at least 75% of these in non-Russian Emerging Europe equities.

    Europe Large-Cap Blend Equity
    Europe Large-Cap Blend Equity funds are fairly representative of the overall European equity market (including the UK) in size, growth rates and price. Equities in the top 70% of the European equity market (including the UK) are defined as large-cap. The blend style is assigned to funds where neither growth nor value characteristics predominate. These funds tend to invest across the spectrum of European industries. These funds invest at least 75% of their portfolio in equities, and at least 75% of these in European equities.
    Morningstar Category Index: MSCI Europe NDTR

    Europe Large-Cap Growth Equity
    Europe Large-Cap Growth Equity funds invest primarily in the equities of large-cap European companies that are more expensive or projected to grow faster than other European large caps. Equities in the top 70% of the capitalisation of the European equity market (including the UK) are defined as large-cap. Growth is defined based on fast growth (high growth rates for earnings, sales, book value, and cash flow) and high valuations (high price ratios and low dividend yields). Most of these funds focus on companies in rapidly expanding industries. These funds invest at least 75% of their portfolio in equities, and at least 75% of these in European equities.
    Morningstar Category Index: MSCI Europe Growth NDTR

    Europe Large-Cap Value Equity
    Europe Large-Cap Value Equity funds invest primarily in the equities of large-cap European companies that are less expensive or growing more slowly than other European large caps. Equities in the top 70% of the capitalization of the European equity market (including the UK) are defined as large-cap. Value is defined based on low valuations (low price ratios and high dividend yields) and slow growth (low growth rates for earnings, sales, book value, and cash flow). These funds invest at least 75% of their portfolio in equities, and at least 75% of these in European equities.

    Europe Mid-Cap Equity
    Some Europe Mid-Cap Equity funds invest in equities of all sizes, thus leading to a madcap profile, but others focus on mid-cap companies. The European mid-cap range represents the 20% of the European equity market (including the UK) that falls between small caps (the bottom 10% of capitalisation) and large caps (the top 70% of capitalisation). These funds invest at least 75% of their portfolio in equities, and at least 75% of these European equities.
    Morningstar Category Index: MSCI Europe NDTR

    Europe Small-Cap Equity
    Europe Small-Cap Equity funds invest primarily in the equities of small-cap European companies. Equities in the bottom 10% of the European equity market (including the UK) are defined as small-cap. These funds invest at least 75% of their portfolio in equities, and at least 75% of these in European equities.
    Morningstar Category Index: MSCI Europe Small Cap NDTR

    Europe ex-UK Equity Large Cap
    Europe ex-UK Large Cap funds invest primarily in the equities of large-cap companies in continental Europe. Equities in the top 70% of the capitalisation of the European equity market (including the UK) are defined as large-cap. These funds may also include smaller positions in the region's smaller markets, including the emerging markets of Eastern Europe. These funds invest at least 75% of their portfolio in equities, and at least 75% of these in European equities, with less than 10% in the UK.
    Morningstar Category Index: MSCI Europe Ex UK NDTR

    Europe ex-UK Small/Mid Cap
    Europe ex-UK Small/Mid Cap funds invest primarily in the equities of small- and mid-cap companies in continental Europe. These funds primarily invest in equities that fall in the bottom 30% of the European equity market (including the UK). These funds may also include smaller positions in the region's smaller markets, including the emerging markets of Eastern Europe. These funds invest at least 75% of their portfolio in equities, and at least 75% of these in European equities, with less than 10% in the UK.
    Morningstar Category Index: MSCI Europe Ex UK Small Cap NDTR

    Eurozone Large-Cap Equity
    Eurozone Large-Cap Equity funds invest primarily in the equities of large-cap companies from the 12 Eurozone countries. Funds in this category typically invest across multiple countries in the Eurozone. Equities in the top 70% of the European equity market (including the UK) are defined as large-cap. These funds invest at least 75% of their portfolio in equities, and at least 75% of these in Eurozone equities.

    Eurozone Mid-Cap Equity
    Some Eurozone Mid-Cap Equity funds invest in equities of all sizes, thus leading to a madcap profile, but others focus on mid-cap companies. Funds in this category typically invest across multiple countries in the Eurozone. The mid-cap range represents the 20% of the European equity market (including the UK) that falls between small caps (the bottom 10% of capitalisation) and large caps (the top 70% of capitalisation These funds invest at least 75% of their portfolio in equities, and at least 75% of these in Eurozone equities.

    Eurozone Small-Cap Equity
    Eurozone Small-Cap Equity funds invest primarily in the equities of small-cap companies from the 12 Eurozone countries. Funds in this category typically invest across multiple countries in the Eurozone. Equities in the bottom 10% of the European equity market (including the UK) are defined as small-cap. These funds invest at least 75% of their portfolio in equities, and at least 75% of these in Eurozone equities.

    Nordic Equity
    Nordic Equity funds invest primarily in equities of companies from Scandinavian countries such as Sweden, Norway, Finland and Denmark. These funds invest at least 75% of their portfolio in equities, and at least 75% of these  in the Nordic countries.

    3. Equity funds with a focus on Asia as a region

    Asia-Pacific with Japan Equity
    Asia-Pacific with Japan Equity funds have a wider investment range than other Asia oriented funds. These funds can invest throughout the Pacific Rim, including Australia and New Zealand. As a result, country weightings for these funds vary tremendously, though most retain some exposure to Japan and Hong Kong.  These funds invest at least 75% of their portfolio in equities, and at least 75% of these in Pacific countries, including at least 15% in Japan.
    Morningstar Category Index: MSCI AC Asia Pacific NDTR

    Asia-Pacific ex-Japan Equity
    Asia-Pacific ex-Japan Equity funds cover a wide geographic range. Most of these funds focus on export-oriented nations such as Hong Kong, Singapore, Taiwan and Korea. These funds invest at least 75% of their portfolio in equities, and at least 75% of these in Pacific Countries, with less than 10% in Japan.
    Morningstar Category Index: MSCI AC Asia Pacific Ex Japan NDTR

    Australia & New Zealand Equity
    Australia & New Zealand Equity portfolios invest at least 75% of total assets in equities, and invest at least 75% of equity assets in Australia and/or New Zealand.
    Morningstar Category Index: MSCI Australia NDTR

    China Equity
    China Equity funds invest primarily in Chinese companies listed on the stock exchanges in China and Hong Kong, and companies that derive significant revenues from or have substantial business ties with the China market. These funds invest at least 75% of their portfolio in equities, and at least 75% of these  in Chinese or China-related companies defined as above. The funds usually invest less than 10% of their portfolio in Taiwanese equities.
    Morningstar Category Index: MSCI China Free NDTR

    Greater China Equity
    Greater China Equity funds invest in companies from the mainland of China, Hong Kong and Taiwan. To a lesser extent, these funds may also invest in companies that derive significant revenues from or have substantial business ties with the three markets. At least 50% of their portfolio is invested in Chinese equities, of which at least 10% is invested in Taiwanese equities. At least 75% of their portfolio invested in equities. Morningstar Category Index: MSCI Golden Dragon Emerging Asia Single Country Equity Emerging Asia Single Country Equity funds invest primarily in the equities of companies from a single Asian country (excluding Japan, Hong Kong, Taiwan, Singapore, China, India, Australia, New Zealand and Korea). Examples are funds that invest mainly in Indonesian or Thai companies. These funds invest at least 75% of their portfolio in equities, and at least 75% of these  in a single emerging Asian country.
    Morningstar Category Index: MSCI AC Asia Pacific Ex Japan NDTR

    Hong Kong Equity
    Hong Kong Equity funds invest primarily in the equities of Hong Kong companies. These funds invest at least 75% of their portfolio in equities, and at least 75% of these  in Hong Kong equities.
    Morningstar Category Index: MSCI Hong Kong NDTR

    India Equity
    India Equity funds invest at least 75% of their portfolio in equities, and at least 75% of these  in Indian equities.
    Morningstar Category Index: MSCI India NDTR

    Japan Large-Cap Equity
    Japan Large-Cap Equity funds invest primarily in the equities of large-cap Japanese companies. Equities in the top 70% of the capitalisation of the Japanese market are defined as large-cap. These funds invest at least 75% of their portfolio in equities, and at least 75% of these in Japanese equities.
    Morningstar Category Index: MSCI Japan NDTR

    Japan Small/Mid-Cap Equity
    Japan Small/Mid-Cap Equity funds invest primarily in the equities of small-cap and madcap Japanese companies. Their holdings typically fall in the bottom 30% of the capitalisation of the Japanese equity market These funds invest at least 75% of their portfolio in equities, and at least 75% of thesein Japanese equities.
    Morningstar Category Index: MSCI Japan Small Cap NDTR

    Korea Equity
    Korea Equity funds invest primarily in the equities of South-Korean companies. These funds invest at least 75% of their portfolio in equities, and at least 75% of these  in Korean equities.
    Morningstar Category Index: MSCI Korea NDTR

    Singapore Equity
    Singapore Equity funds invest at least 75% of their portfolio in equities, and at least 75% of these  in Singapore equities.
    Morningstar Category Index: MSCI Singapore NDTR

    Taiwan Equity
    Taiwan Equity funds invest at least 75% of their portfolio in equities, and at least 75% of these in Taiwanese equities.
    Morningstar Category Index: MSCI Taiwan NDTR

    4. Global equity funds 

    Emerging Markets Equity
    Emerging Markets Equity funds tend to divide their assets among several emerging markets in Asia, Latin America, Europe, Middle East and/or Africa. These funds invest at least 75% of their portfolio in equities, and at least 75% of these in emerging markets equities.
    Morningstar Category Index: MSCI EM (Emerging Markets) NDTR

    Global Large-Cap Blend Equity
    Global Large-Cap Blend Equity funds invest primarily in the equities of large-cap companies from around the globe. Most of these funds divide their portfolio over many developed markets, of which they invest at least 20% in North America and 15% in Greater Europe. Equities in the top 70% of the capitalisation of each of the seven regional Morningstar style zones are defined as large-cap (the style zones are Europe, U.S., Canada, Latin America, Japan, Asia ex-Japan, and Australia/New Zealand--please see the Morningstar Style Box Methodology for further information). The blend style is assigned to funds where neither growth nor value characteristics predominate. At least 75% of the portfolio is invested in equities.
    Morningstar Category Index: MSCI The World Index Free NDTR

    Global Large-Cap Growth Equity
    Global Large-Cap Growth Equity funds invest primarily in the equities of large-cap growth companies from around the globe. Most of these funds divide their portfolio over many developed markets and invest at least 20% of equities in North America and 15% in Greater Europe. Equities in the top 70% of the capitalisation of each of the seven regional Morningstar style zones are defined as large-cap (the style zones are Europe, U.S., Canada, Latin America, Japan, Asia ex-Japan, and Australia/New Zealand--please see the Morningstar Style Box Methodology for further information). Growth is defined based on fast growth (high growth rates for earnings, sales, book value, and cash flow) and high valuations (high pric e ratios and low dividend yields). At least 75% of the portfolio is invested in equities.
    Morningstar Category Index: MSCI The World Index Free Growth NDTR

    Global Large-Cap Value Equity
    Global Large-Cap Value Equity funds invest primarily in the equities of large-cap value companies from around the globe. Most of these funds divide their portfolio over many developed markets and invest at least 20% of equities in North America and 15% in Greater Europe. Equities in the top 70% of the capitalisation of each of the seven regional Morningstar style zones are defined as large-cap (the style zones are Europe, U.S., Canada, Latin America, Japan, Asia ex-Japan, and Australia/New Zealand--please see the Morningstar Style Box Methodology for further information). Value is defined based on low valuations (low price ratios and high dividend yields) and slow growth (low growth rates for earnings, sales, book value, and cash flow). At least 75% of the portfolio is  invested in equities.
    Morningstar Category Index: MSCI The World Index Free Value NDTR

    Global Equity Small/Mid Cap
    Global Equity Small/Mid Cap funds invest primarily in the equities of small- and mid-cap companies from around the globe. Most of these funds divide their portfolio over many developed markets and invest at least 20% of equities in North America and 15% in Greater Europe. Equities in the bottom 10% of the capitalisation of each of the seven regional Morningstar style zones are defined as small-cap, and equities in the next 20% of each market’s capitalisation are defined as mid-cap (the style zones are Europe, U.S., Canada, Latin America, Japan, Asia ex-Japan, and Australia/New Zealand--please see the Morningstar Style Box Methodology for further information). At least 75% of the portfolio is invested in equities.
    Morningstar Category Index: MSCI The World Index Small Cap NDTR

    5. Equity Funds per Sector

    Sector Equity Biotechnology
    Sector Equity Biotechnology funds invest primarily in the equities of companies that focus on biotechnology. These funds invest at least 75% of their portfolio in equities and invest at least 50% of these in the biotechnology industry.
    Morningstar Category Index: MSCI Wrld/Biotechnology NDTR

    Sector Equity Communications
    Sector Equity Communications funds invest primarily in the equities of telecommunications and media companies of various kinds. Most buy some combination of cable television, wireless-communications, and communications-equipment firms as well as traditional phone companies. These funds invest at least 75% of their portfolio in equities and invest at least 50% of these media sectors.
    Morningstar Category Index: MSCI Wrld/Comml Svc & Suppl NDTR

    Sector Equity Consumer Goods and Services
    Sector Equity Consumer Goods and Services funds invest primarily in the equities of companies that manufacture or provide consumer goods or services. These funds invest at least 75% of their portfolio in equities and invest at least 50% of these in the consumer goods and/or consumer services sectors.
    Morningstar Category Index: 50% MSCI Wrld/Consumer Discretionary NDTR, 50% MSCI Wrld/ Consumer Staples NDTR

    Sector Equity Energy
    Sector Equity Energy funds invest primarily in the equities of companies that produce or refine oil and gas, oilfield services and equipment companies, and pipeline operators. These funds invest at least 75% of their portfolio in equities and invest at least 50% of these in energy equities.
    Morningstar Category Index: MSCI Wrld/Energy NDTR

    Sector Equity Financial Services
    Sector Equity Financial Services funds invest primarily in the equities of companies in the financial services sector, including banks, brokerage firms, insurance companies and consumer credit providers. These funds invest at least 75% of their portfolio in equities and invest at least 50% of these in financial services companies.
    Morningstar Category Index: MSCI Wrld/Financials NDTR

    Sector Equity Health Care
    Sector Equity Health Care funds invest primarily in the equities of companies in the medical and health-care industries. Most invest in a range of companies, buying everything from pharmaceutical and medical device makers to hospitals and nursing homes. A few funds concentrate on just one industry segment, such as medical devices. These funds invest at least 75% of their portfolio in equities and invest at least 50% of these in health care companies.
    Morningstar Category Index: MSCI Wrld/Health Care NDTR

    Sector Equity Industrial Materials
    Sector Equity Industrial Materials funds invest primarily in the equities of industrialmaterials companies. These include companies that provide or manufacture chemicals, machinery, building materials, and commodities, as well as aerospace and defence firms. These funds invest at least 75% of their portfolio in equities and invest at least 50% of these in industrial materials companies.
    Morningstar Category Index: MSCI Wrld/Materials NDTR

    Sector Equity Precious Metals
    Sector Equity Precious Metals portfolios invest primarily in the equities of mining companies, though some may own gold or other metals outright. Most portfolios concentrate on gold-mining equities, but some have significant exposure to silver-, platinum-, and base-metal-mining equities as well. Many precious-metals companies are based in North America, Australia, and South Africa.

    Sector Equity Technology
    Sector Equity Technology funds invest primarily in the equities of companies in the hardware and software sectors. Most concentrate on computer, semiconductor, software, networking and internet-related equities. Some concentrate on a single technology industry. These funds invest at least 75% of their portfolio in equities and invest at least 50% of these in the hardware and software sectors.
    Morningstar Category Index: MSCI Wrld/Information Tech NDTR

    Sector Equity Utilities
    Sector Equity Utilities funds invest primarily in the equities of companies in the utilities sector. The sector includes electric, gas, and water companies, but not telecommunications or cable companies. These funds invest at least 75% of their portfolio in equities and invest at least 50% of theseutility companies.
    Morningstar Category Index: MSCI Wrld/Utilities NDTR

  • Morningstar category for fixed income funds

    Funds are grouped into categories by Morningstar according to their actual investment style, not merely their stated investment objectives, nor their ability to generate a certain level of income. To ensure homogeneous groupings, Mordningstar normally allocates funds to categories on the basis of their portfolio holdings.

    Asia/Japan Convertible Bond
    Asia/Japan Convertible Funds invest principally in convertible securities denominated or hedged into the Yen or other Asian currencies.

    Dollar/Global Convertible Bond

    These funds invest principally in convertible securities denominated in or hedged into the U.S. dollar or have global currency exposure.
    Morningstar Category Index: Merrill Lynch All Conv, All Qualities

    Emerging Europe Bond
    Emerging Europe Bond funds invest principally in bonds of issuers in emerging markets countries in Europe. Most funds will invest in several countries or currencies, though same may specialise in a single country or currency.
    Morningstar Category Index: ML EUR EM Sovr EUR/ME/Afr

    Euro Convertible Bond
    Euro Convertible Bond funds invest principally in convertible securities denominated in or hedged into the Euro.

    Euro Short Bond
    Euro Short Bond funds invest in short-dated bonds denominated or hedged into euros. The aggregate maturity for each fund does not tend to exceed three years.
    Morningstar Category Index: Citigroup Eurozone GBI 1-3Y

    Euro Government Bond
    Euro Government Bond funds invest primarily in government or government-backed agency securities denominated or hedged into the relevant currency.
    Morningstar Category Index: Citigroup Eurozone GBI

    Euro Global Bond
    Euro Global Bond funds invest in fixed income securities and take material currency exposures as part of their investment strategies. These funds are optimised in euros and a moderate credit exposure is possible.
    Morningstar Category Index: Citigroup WGBI In Euros

    Euro Global Bond - Hedged
    Euro Global Bond – Hedged funds invest in bonds on a global basis, and normally hedge all of their currency exposure back into the Euro.
    Morningstar Category Index: Citi Ccy-Hdg WGBI Euros

    Euro High Yield Bond
    Euro High Yield Bond funds invest in higher yielding securities denominated or hedged into the relevant currency. These funds invest 40% or more of their assets in securities with a credit quality equivalent to BB, or lower.
    Morningstar Category Index: Lehman Pan-European High Yield (Euro)

    Euro Inflation Linked Bond
    Euro Inflation Linked Bond funds invest principally in inflation-linked bonds denominated in or hedged into the Euro.
    Morningstar Category Index: EuroMTS Inflation Linked Aggregate

    Non-Euro Inflation Linked Bond
    Non-Euro Inflation Linked Bond funds invest primarily in inflation-linked bonds denominated in or hedged into currencies other than the Euro.
    Morningstar Category Index: ML Glb Gov Inflation-Linked

    Euro Long Bond
    Euro Long Bond funds invest principally in bonds denominated in or hedged into the Euro. The average maturity for each fund is generally greater than 10 years.
    Morningstar Category Index: Citi Eurozone GBI 10+Y

    Euro Diversified Bond
    Euro Diversified Bond funds have a generalist mandate and do not exhibit significant risk concentrations. This category contains funds that are not eligible for other Eurodenominated/ hedged bond fund categories.
    Morningstar Category Index: Lehman Euro-Aggregate Index

    European Bond
    European Bond funds invest in European fixed income securities. This category is similar to the Euro Global Bond category, except that the foreign currency exposure is limited to European currencies.
    Morningstar Category Index: Lehman Pan-European Aggregate

    Sterling Money Market
    Sterling Money Market funds invest in Sterling-denominated money market instruments. The residual aggregate maturity of those instruments does not exceed 12 months.
    Morningstar Category Index: Citigroup 3M Sterling Deposit

    Sterling Government Bond
    Sterling Government Bond funds invest primarily in government or government-backed agenc y securities denominated or hedged into the relevant currency.
    Morningstar Category Index: Citigroup UK GBI, All Maturities, USD

    Sterling High Yield Bond
    Sterling High Yield Bond funds invest in higher yielding securities denominated or hedged into Sterling. These funds will invest 40% or more of their assets in securities with a credit quality equivalent to BB, or lower.
    Morningstar Category Index: Lehman Pan-European High Yield (Non-Euro)

    Sterling Global Bond
    Sterling Global Bond funds invest in fixed income securities and take material currency exposures as part of their investment strategies, but are optimised in Sterling. A moderate credit exposure is possible.
    Morningstar Category Index: Citigroup WGBI, All Maturities, In Sterling

    Sterling Diversified Bond
    Sterling Diversified Bond funds have a generalist mandate and do not exhibit significant risk concentrations. This category contains funds that are not eligible for other bond fund categories.
    Morningstar Category Index: Lehman Sterling Aggregate

    Dollar Short Bond
    Dollar Short Bond funds invest in short-dated bonds denominated in or hedged into U.S. dollars. The aggregate maturity for each fund does not tend to exceed three years.
    Morningstar Category Index: Citigroup U.S. GBI 1-3 Year Sector

    Dollar Government Bond
    Dollar Government Bond funds invest primarily in government or government-backed agency securities denominated in or hedged into the relevant currency.
    Morningstar Category Index: Citigroup U.S. GBI, All Maturities, In Euros

    Dollar Global Bond
    Dollar Global Bond funds invest in fixed income securities and take material currency exposures as part of their investment strategies. These funds are optimised in U.S. dollars and a moderate credit exposure is possible.
    Morningstar Category Index: Citigroup World GBI

    Dollar High Yield Bond
    Dollar High Yield Bond funds invest in higher yielding securities denominated or hedged into the relevant currency. These funds invest 40% or more of their assets in securities with a credit quality equivalent to BB, or lower.
    Morningstar Category Index: Lehman High Yield Corporate Bond Index

    Dollar Diversified Bond
    Dollar Diversified Bond funds have a generalist mandate and do not exhibit significant risk concentrations. This category contains funds that are not eligible for other dollar-denominated/ hedged bond fund categories.
    Morningstar Category Index: Lehman Aggregate Bond Index

    SEK Bond
    SEK Bond funds invest in bonds denominated or hedged into Swedish Krona. The aggregate maturity of these funds exceeds three years.
    Morningstar Category Index: Citigroup Sweden GBI

    SEK Money Market
    SEK Money Market funds invest in Swedish Krona-denominated money market instruments. The residual aggregate maturity does not exceed 12 months.
    Morningstar Category Index : Statsobligasjonsind. 0.25

    SEK Short Bond
    SEK Short Bond invests in short-dated bonds denominated or hedged into Swedish Krona. The aggregate maturity does not exceed three years. Morningstar Category Index: Citigroup Sweden GBI 1-3Y NOK Bond NOK Bond funds invest in bonds denominated or hedged into Norwegian Krone, where the aggregate maturity exceeds three years.
    Morningstar Category Index: Statsobligasjonsind. 3.00

    NOK Money Market
    NOK Money Market funds invest in Norwegian Krone-denominated money market instruments. The residual aggregate maturity does not exceed 12 months.
    Morningstar Category Index: Statsobligasjonsind. 0.25

    NOK Short Bond
    NOK Short Bond Funds invest in short-dated bonds denominated or hedged into Norwegian Krone. The aggregate maturity does not exceed three years.
    Morningstar Category Index: Statsobligasjonsind. 1.00

    DKK Money Market
    DKK Money Market funds invest in Danish Krone-denominated money market instruments. The residual aggregate maturity does not exceed 12 months.

    DKK Bond
    DKK Bond invests in bonds denominated or hedged into Danish Krone, where the aggregate maturity exceeds three years.
    Morningstar Category Index: Citigroup Danish GBI, All Maturities, In Euros

    DKK Short Bond
    DKK Short Bond funds invest in short-dated bonds denominated or hedged into Danish Krone. The aggregate maturity does not exceed three years.
    Morningstar Category Index: Citigroup Danish GBI, 1-3 Year Sector, USD

    CHF Money Market
    CHF Money Market funds invest in Swiss Francs-denominated money market instruments. The residual aggregate maturity does not exceed 12 months.
    Morningstar Category Index: Citigroup Swiss Franc 1-Month Euro Deposit, USD

    CHF Bond
    CHF Bond funds invest in bonds denominated or hedged into Swiss Franc , where the aggregate maturity exceeds three years.
    Morningstar Category Index: Citigroup Swiss GBI, all maturities

    CHF Global Bond
    CHF Global Bond funds invest in fixed income securities and are taking material currency exposures as part of their investment strategies. These funds optimise their returns in Swiss Francs and a moderate credit exposure is possible.
    Morningstar Category Index: Citigroup WGBI CHF

    CAD Bond and Cash

    CAD Bond and Cash funds invest in Canadian Dollar-denominated bonds and/or money market securities.
    Morningstar Category Index: Citigroup Canadian GBI, all maturities

    AUD Bond and Cash
    AUD Bond and Cash funds invest in Australian Dollar-denominated bonds and/or money market securities.
    Morningstar Category Index: Citigroup Australian GBI, all maturities

    JPY Bond
    JPY Bond funds invest in Japanese Yen-denominated bonds and money market securities.
    Morningstar Category Index: Citigroup Japanese GBI, All Maturities, USD

    Taiwan Bond
    Taiwan Bond funds invest in Taiwan Dollar-denominated Bonds and/or money market securities.
    Morningstar Category Index: JPM Taiwan Local Markets Index Plus (USD)

    Asia Bond
    The Asia Bond funds category consists of all funds investing in Asian Bonds and money market securities (excl. funds that exclusively invest in Australia, Japan or Taiwan).
    Morningstar Category Index: JPM Asia Local Markets Index Plus (USD)

    Emerging Markets Bond
    Emerging Market Bond funds are dedicated to fixed income securities of issuers in emerging market countries. Most funds will invest in several currencies or countries. Some might have a more specialized approach.
    Morningstar Category Index: JPM EMBI+

  • Morningstar category for mixed funds

    Funds are grouped into categories by Morningstar according to their actual investment style, not merely their stated investment objectives, nor their ability to generate a certain level of income. To ensure homogeneous groupings, Morningstar normally allocates funds to categories on the basis of their portfolio holdings.

    CHF Aggressive Balanced
    CHF Aggressive Balanced funds have a mandate to balance equity and bond investments for a Swiss Franc -based investor. The equity component does not exceed 75% in the normal running of the fund.
    Morningstar Category Index: 40% Citi Switzerland GBI, 60% FTSE World

    CHF Cautious Balanced
    CHF Cautious Balanced funds have a mandate to balance equity and bond investments for a Swiss Franc -based investor. The equity component does not exceed 40% in the normal running of the fund.
    Morningstar Category Index: 75% Citi Switzerland GBI, 60% FTSE World

    DKK Balanced
    DKK Balanced funds have a mandate to balance equity and bond investments for a Danish Krone-based investor. The equity component does not exceed 75% in the normal running of the fund.
    Morningstar Category Index: 50% Citi Danish GBI, 50% FTSE World

    Dollar Balanced
    Dollar Balanced funds have a mandate to balance equity and bond investments for a U.S. Dollar-based investor. The equity component does not exceed 75% in the normal running of the fund.
    Morningstar Category Index: LB $ Aggregate 50% / FTSE World 50%

    Euro Cautious Balanced
    Euro Cautious Balanced funds have a mandate to balance equity and bond investments for a Euro-based investor. The equity component does not exceed 35% in the normal running of the fund.
    Morningstar Category Index: LB Euro-Agg. 75% / FTSE World 25%

    Euro Moderate Balanced
    Euro Moderate Balanced funds have a mandate to balance equity and bond investments for a Euro-based investor. The equity component does not exceed 60% in the normal running of the fund.
    Morningstar Category Index: LB Euro-Agg. 50% / FTSE World 50%

    Euro Aggressive Balanced
    Euro Aggressive Balanced funds have a mandate to balance equity and bond investments for a Euro-based investor. The equity component does not exceed 75% in the normal running of the fund.
    Morningstar Category Index: LB Euro-Agg. 25% / FTSE World 75%

    NOK Balanced
    NOK Balanced funds have a mandate to balance equity and bond investments for a Norwegian-Krone based investor. The equity component does not exceed 75% in the normal running of the fund.
    Morningstar Category Index: 50% Citi Norway GBI, 50% FTSE World

    SEK Aggressive Balanced
    SEK Aggressive Balanced funds have a mandate to balance equity and bond investments for a Swedish-Krona based investor. The equity component does not exceed 75% in the normal running of the fund.
    Morningstar Category Index: 40% Citi Sweden GBI, 30% MSCI Sweden NDTR, 30% FTSE World

    SEK Cautious Balanced
    SEK Cautious Balanced funds have a mandate to balance equity and bond investments for a Swedish-Krona based investor. The equity component does not exceed 40% in the normal running of the fund.
    Morningstar Category Index: 75% Citi Sweden GBI, 12.5% MSCI Sweden NDTR, 12.5% FTSE World

    Sterling Aggressive Balanced
    Sterling Aggressive Balanced funds have a mandate to balance equity and bond investments for a sterling-based investor. The equity component does not exceed 75% in the normal running of the fund.
    Morningstar Category Index: 40% Lehman Brothers Sterling Aggregate, 60% FTSE World

    Sterling Cautious Balanced
    Sterling Cautious Balanced funds have a mandate to balance equity and bond investments for a Sterling-based investor. The equity component does not exceed 40% in the normal running of the fund.
    Morningstar Category Index: 75% Lehman Brothers Sterling Aggregate, 25% FTSE World

    Asia Balanced
    Asia Balanced funds have a mandate to balance equity and bond investments for an Asia based investor. The equity component does not exceed 75% in the normal running of the fund.
    Morningstar Category Index: 50% JPM Asia Local Markets Index Plus (USD) / 50% MSCI AC Asia Pacific NDTR

    Taiwan Balanced
    Taiwan Balanced funds have a mandate to balance equity and bond investments for a Taiwan-based investor. The equity component does not exceed 75% in the normal running of the fund.
    Morningstar Category Index: 50% JPM Taiwan Local Markets Index Plus (USD) / 50% MSCI Taiwan NDTR

    Euro Absolute Return
    Euro Absolute Return funds have an investment objective of pursuing positive returns in all market environments, and risk controls and investment capabilities sufficient to give the fund a reasonable chance of meeting that objective. They should not display a negative return over an 18 month period. Such funds will typically have a stated benchmark reflecting that goal (e.g., Euribor + 2%, etc.), and should have the ability to invest across asset classes and/or use derivatives. The funds in this category will invest primarily in instruments denominated in or hedged into the Euro.
    Morningstar Category Index: ML Euro LIBOR 1-Mth Const Mat (LOC)

    Non-Euro Absolute Return
    Non Euro Absolute Return funds have an investment objective of pursuing positive returns in all market environments, and risk controls and investment capabilities sufficient to give the fund a reasonable chance of meeting that objective. They should not display a negative return over an 18 month period. Such funds will typically have a stated benchmark reflecting that goal (e.g., Libor + 2%, etc.), and should have the ability to invest across asset classes and/or use derivatives. The funds in this category will invest primarily in instruments denominated in or hedged into currencies other than the Euro.
    Morningstar Category Index: ML GBP LIBOR 1-Mth Const Mat (LOC)
     

  • Morningstar Style Box

    The Morningstar Style Box is a nine square grid that provides a graphical representation of the various investment styles. Morningstar offers a Style Box for both stocks as bonds.

    For stocks and stock funds, it classifies securities according to their size or market capitalization (the vertical axis of the Style Box) and the investment style of the stock (growth equity or value equity) (the horizontal axis of the Style Box).

    Morningstar Style Box for stocks

    morningstar_stylebox_stocks_en

    Style Box assignments begin at the individual stock level. Morningstar determines the investment style of each individual stock in their database. The style attributes of individual stocks are then used to determine the style classification of stock mutual funds.

    A stock fund is an aggregation of individual stocks and its style is determined by the style assignments of the stocks in which it invests. By plotting all of a fund's stocks on the stock style grid, the range of stock styles included in the fund immediately becomes apparent. An asset-weighted average of the underlying stocks' style and size scores determines a fund's placement in the Style Box. Style box assignments for stocks are updated each month. Assignments for funds are recalculated whenever Morningstar receives updated portfolio holdings for the fund.

    Morningstar Style Box for bonds

    morningstar_stylebox_bonds_en

    Bonds and bonds funds are classified with regards to their solvency (the vertical axis of the Style Box) and sensitivity to changes in rates (the horizontal axis of the Style Box).

    As depicted in the Style Box image, the three interest sensitivity groups are limited, moderate and extensive and the three credit quality groups are high, medium and low. These groupings display a portfolio's effective duration and bond credit ratings.

    Horizontal Axis: Interest-Rate Sensitivity

    The horizontal axis focuses on interest-rate sensitivity as measured by the bond's portfolio effective duration.

    American bond funds with duration of 4.5 years or less qualify as low; more than 4.5 years but less than 7 years, medium; and more than 7 years, high.

    Non-US domiciled funds use other static duration breakpoints. These thresholds are:

        Limited: <= 3.5 years

        Moderate: > 3.5 and <= 6 years

        Extensive: > 6 years

    Vertical Axis: Credit Quality

        "Low" credit quality – where asset weighted average credit rating is less than "BBB-"

        "Medium" credit quality – where asset weighted average credit rating is less than "AA-" but greater or equal to “BBB-”

        "High" credit quality – where asset weighted average credit rating is "AA-" and higher

  • Mutual Fund or UCI

    When you invest in a mutual fund, your money is pooled with that of other investors, and then it is managed by a group of professionals who try to earn a return by selecting stocks for the portfolio. This Undertaking for Collective Investment or UCI is often called a fund in the vernacular. One key advantage of funds is that they can be less volatile. Simple statistics say that a portfolio will experience less volatility than the individual components of the portfolio. After all, individual stocks can and sometimes do go to zero, but if a mutual fund held 50 stocks, it would be very unlikely that all 50 of those stocks become worthless. The flipside of this reduced volatility is that fund returns can be muted relative to individual stocks. In investing, risk and return are intimately correlated—reduce one, and odds are you will reduce the other. Mutual fund investors must also consider expenses. The professionals running mutual funds do not do so for free. They charge fees, and fees eat into returns.