Glossary: Fund vs. Fund Report - Morningstar

[Pages:1]Glossary: Fund vs. Fund Report

Gross Expense Ratio is the expense ratio listed in the fund's prospectus, prior to any deductions due to waivers or reimbursements. This number may be equal to or greater than the Prospectus Net Expense Ratio.

The Morningstar RatingTM provides a quick assessment of a fund's past risk-adjusted performance relative to its category peers. Funds are rated for the trailing three-, five-, and 10-year periods and these ratings are combined to produce an overall rating. Within each rating period, the top 10% of funds receive five stars, the next 22.5% receive four stars, the middle 35% receive three stars, the next 22.5% receive two stars, and the bottom 10% receive one star. The Morningstar Rating for mutual funds is completely objective and is based solely on each fund's past risk-adjusted performance. Offerings with less than three years of performance history are not rated.

Morningstar Return, a component of the Morningstar Rating, measures a fund's excess return over a risk-free rate (the return for the 90-day Treasury bill) in comparison with similar investments, after adjusting for all applicable loads and sales charges.

Morningstar Risk, also a component of the Morningstar Rating, provides an assessment of the variations of a fund's monthly returns, with an emphasis on downside variations when compared with similar investments.

The Prospectus Net Expense Ratio is pulled from the fund's prospectus and shows expenses the fund company anticipates will actually be paid by the fund's shareholders in the upcoming fiscal year, less any expense waivers, offsets, or reimbursements. In summary, the prospectus net expense ratio is forward looking and the net annual report expense ratio is backward looking.

Standardized Returns adjust performance for all sales charges and ongoing fund expenses. These returns also assume any dividends and capital gains are reinvested. No adjustments are made, however, for the effects of taxes.Trailing standardized returns can be shown only for one-year, five-year, 10-year, and since-inception time periods. Standardized returns never include pre-inception data.

Total Returns represent the investment performance of the mutual fund. Ongoing fund expenses, as reflected by the expense ratio, are accounted for, but sales fees and charges are not.

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