Morningstar Risk Rating

The Morningstar Risk rating is an assessment of the past downside risk a fund has exhibited relative to other offerings in its category, as evidenced by its monthly returns. Investors can use this rating to gauge the amount of risk they are taking on when they invest in a fund.

If two funds have precisely the same return, the one with greater variations in its return is given the larger risk score. In each Morningstar Category, the top 10% of funds earn a rating of High, the next 22.5% earn Above Average, the middle earn 35% Average, the next 22.5% earn Below Average, and the bottom 10% earn Low.

Morningstar Return is measured for up to three time periods (three, five, and 10 years). These separate measures are then weighted and averaged to produce an overall measure for the fund. Funds with less than three years of performance history are not rated.