Why We're Changing Our Medalists Ratings

We are consolidating our two forward-looking managed investment ratings to better address a quickly-evolving world of investment products.

Morningstar 2 May, 2023 | 9:30AM
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Kunal Kapoor

Morningstar today consolidates its two forward-looking managed investment ratings – the Morningstar Analyst Rating™ and the Morningstar Quantitative Rating™ for funds – into a single rating: the Morningstar Medalist Rating™.

Morningstar’s Analyst and Quantitative Ratings celebrated their 10 and 15-year anniversaries in 2021, respectively. However, as managed investment grow rapidly, the company has concluded a single rating system will allow it to use the best of its qualitative and quantitative insights to create reliable ratings for investors.

"The takeaway is that we think humans and machines can work well together – and solve this problem of ever-expanding investment choices," Morningstar chief executive Kunal Kapoor said at Morningstar Investment Conference in Chicago last week.

"In fact, one of the things I’m most excited about is that next week, we will deliver on the promise we made here last year, and the Morningstar Analyst Rating and Morningstar Quantitative Rating will combine into one single rating – the Morningstar Medalist Rating."

Previously, Morningstar conducted forward-looking assessments of managed investments in two ways: manager research analysts qualitatively assessed managed investments they cover, with those assessments culminating in an Analyst Rating of Gold, Silver, Bronze, Neutral or Negative.

But Morningstar also uses algorithmic techniques to assess managed investments that analysts do not cover. Those quantitative assessments underpin the Quantitative Rating, titled GoldQ, SilverQ, BronzeQ, NeutralQ, and NegativeQ.

By uniting the Analyst Rating and Quantitative Rating under the Medalist Rating banner, Morningstar will move to a common ratings scale of Gold, Silver, Bronze, Neutral and Negative, removing the superscript "Q" designation from the ratings of managed investments assessed quantitatively. The change takes effect immediately, and further content will be forthcoming to help investors understand the transition.

Ratings, Research, Insight.

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