See Actual Fees

The name of the individual or individuals who are employed by the advisor or subadvisor who are directly responsible for managing the fund's portfolio, as taken directly from the fund's prospectus. Other terms that may appear in this column include the following:

Multiple Managers
This term appears when more than two people are involved in the fund management, and they manage independently. Where this term is used, quite often the fund has divided net assets in set amounts among the individual managers. In most cases, multiple managers are employed at different subadvisors or investment firms.

Management Team
This is used when there are more than two people involved in fund management, and they manage together, or when the fund strongly promotes its team-managed aspect.

Et al
When this term appears after a manager name, it indicates that while other people are involved in fund management, the person listed acts as the leader or is recognized by the fund as being the principal player.

This represents the number of years that the current manager has been the portfolio manager of the fund. For funds with more than one manager, the average tenure is shown. If there is only one manager and he/she has been at the fund for less than six months (and there is biographical information available), a dash will appear. If the fund designates the manager as a Management Team and does not disclose the names of the portfolio manager or co-portfolio managers to Morningstar, Manager Tenure will appear as a dash for the fund.

See Average Market Cap

% Developed Markets
These numbers show the percentage of a fund's common stocks that are domiciled in developed, as opposed to emerging, markets. Developed markets, for purposes of this calculation, include Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, Luxembourg, the Netherlands, New Zealand, Norway, Singapore, Spain, Sweden, Switzerland, the United Kingdom, The United States, and a handful of smaller countries and territories (such as Gibraltar). All other countries are considered emerging markets. Emerging markets normally carry greater political and economic risk than developed countries, and stocks located in them are normally less liquid and more volatile. When Morningstar cannot determine the country in which a stock issuer is domiciled, it is categorized as "Not Available" for any fund that holds it.

% Emerging Markets
These numbers show the percentage of a fund's common stocks that are domiciled in emerging, as opposed to developed, markets. (See above for definition of Developed Markets).

Initial Sales Fee (Front-end Load)
The initial sales charge or front-end load is a deduction made from each investment in the fund. The amount is generally based on the amount of the investment. Larger investments, both initial and cumulative, generally receive percentage discounts based on the dollar value invested. A typical front-end load might be a 4% charge for purchases less than $50,000, but might decrease as the amount of the investment increases.

Deferred Sales Fee (Back-end Load)
Also called a contingent deferred sales charge or back-end load, a deferred load is an alternative to the traditional front-end sales charge as it is only deducted at the time of sale of fund shares. The deferred load structure commonly decreases to zero over a period of time. A typical deferred load's structure might have a 5% charge if shares are redeemed within the first year of ownership, and decline by a percentage point each year thereafter. These loads are normally applied to the lesser of original share price or current market value. It is important to note that although the deferred load declines each year, accumulated annual distribution and services charges (the total 12b-1 fee) can sometimes offset this decline.

Redemption Fee
The redemption fee is an amount charged when money is withdrawn from the fund. This fee does not go back into the pockets of the fund company, but rather into the fund itself and does not represent a net cost to shareholders. Also, unlike contingent deferred sales charges, redemption fees typically operate only in short, specific time clauses, commonly 30, 180, or 365 days. However, some redemption fees exist for up to five years. Charges are not imposed after the stated time has passed. These fees are typically imposed to discourage market timers, whose quick movements into and out of funds can be disruptive. The charge is normally imposed on the ending share value, appreciated or depreciated from the original value.

Represents the annualized total return for a fund over 3-, 5-, and 10-year time periods.

The mean EPS estimate that is derived from all polled analysts' estimates.

Initial Investment
The minimum purchase indicates the smallest investment amount a fund will accept to establish a new account.

Additional Investment
This indicates the smallest permissible additional purchase a fund will accept in an existing account.

Initial IRA Investment
The smallest investment amount accepted for establishing an individual retirement account. If none appears, the fund does not have a plan. If the minimum is zero, then $0 will appear.

Additional IRA Investment
This indicates the smallest permissible additional purchase a fund will accept in an existing IRA account. If the minimum is zero, then $0 will appear.

Initial Auto-Invest Program Investment
This indicates the smallest amount with which one may enter a fund's automatic-investment plan—an arrangement where the fund takes money on a monthly, quarterly, semiannual, or annual basis from the shareholder's checking account. Often, the normal minimum initial purchase requirements are waived in lieu of this systematic investment plan. The systematic investment amount is the minimum amount required for subsequent regular investments in an automatic investment plan. Studies indicate that regular automatic investment, also known as dollar-cost averaging, is perhaps the most successful investment plan for long-term investors.

Additional Auto-Invest Program Investment
This indicates the smallest permissible additional investment a fund will accept in an existing automatic-investment plan account.

This proprietary Morningstar data point indicates whether a security has a recent Analyst Report available. Each Analyst Report is written by Morningstar's own in-house analyst staff and provides insightful evaluations of management, past performance, and suitability for investors.

This is a proprietary Morningstar data point. While the investment objective stated in a fund's prospectus may or may not reflect how the fund actually invests, the Morningstar category is assigned based on the underlying securities in each portfolio. Morningstar categories help investors and investment professionals make meaningful comparisons between funds. The categories make it easier to build well-diversified portfolios, assess potential risk, and identify top-performing funds. Morningstar places funds in a given category based on their portfolio statistics and compositions over the past three years. If the fund is new and has no portfolio history, Morningstar estimates where it will fall before giving it a more permanent category assignment. When necessary, Morningstar may change a category assignment based on recent changes to the portfolio.

Domestic-Stock Funds
Funds with at least 70% of assets in domestic stocks are categorized based on the style and size of the stocks they typically own. The style and size divisions reflect those used in the Morningstar investment style box: value, blend, or growth style and small, medium, or large median market capitalization. (See Morningstar Style Box (Funds) for more details on style methodology.)

Based on their investment style over the past three years, domestic-stock funds are placed in one of the nine categories: large growth, large blend, large value, medium growth, medium blend, medium value, small growth, small blend, orsmall value. Domestic-equity funds that specialize in a particular sector of the market are placed in a specialty category: communications, financials, health care, natural resources, precious metals, real estate, technology, utilities, or convertible bond.

Finally, there are also domestic-stock categories covering:

Conservative Allocation
A fund that invests in both stocks and bonds and maintains a relatively small position in stocks. The funds typically have 20% to 50% of assets in stocks and 50% to 80% of assets in bonds and cash.

Moderate Allocation
A fund that invests in both stocks and bonds and maintains a relatively large position in stocks. The funds typically have 50% to 70% of assets in stocks and the remainder in bonds and cash.

Bear Market
A fund that uses short positions and derivatives in order to profit from stocks that drop in price. Because these funds have extensive holdings in shorts or puts, their returns generally move in the opposite direction of the benchmark index.

International-Stock Funds
Stock funds that have invested 40% or more of their equity holdings in foreign stocks (on average over the past three years) are placed in one of the following international-stock categories:

Europe
At least 75% of stocks invested in Europe.

Japan
At least 75% of stocks invested in Japan.

Latin America
At least 75% of stocks invested in Latin America.

Diversified Pacific
At least 65% of stocks invested in Pacific countries, with at least an additional 10% of stocks invested in Japan.

Asia/Pacific ex-Japan
At least 75% of stocks invested in Pacific countries, with less than 10% of stocks invested in Japan.

Diversified Emerging Markets
At least 50% of stocks invested in emerging markets.

Foreign
An international fund having no more than 20% of stocks invested in the United States.

World
An international fund having more than 20% of stocks invested in the United States.

World Allocation
Used for funds with stock holdings of greater than 20% but less than 70% of the portfolio where 40% of the stocks and bonds are foreign.

Bond Funds
Funds with 80% or more of their assets invested in bonds are classified as bond funds. Bond funds are divided into two main groups: taxable bond and municipal bond. (Note: For all bond funds, maturity figures are used only when duration figures are unavailable.)

Taxable-Bond Funds

Long-Term Government
A fund with at least 90% of bond portfolio invested in government issues with a duration of greater than or equal to six years, or an average effective maturity of greater than 10 years.

Intermediate-Term Government
A fund with at least 90% of its bond portfolio invested in government issues with a duration of greater than or equal to 3.5 years and less than six years, or an average effective maturity of greater than or equal to four years and less than 10 years.

Short-Term Government
A fund with at least 90% of its bond portfolio invested in government issues with a duration of greater than or equal to one year and less than 3.5 years, or average effective maturity of greater than or equal to one year and less than four years.

Long-Term Bond
A fund that focuses on corporate and other investment-grade issues with an average duration of more than six years, or an average effective maturity of more than 10 years.

Intermediate-Term Bond
A fund that focuses on corporate, government, foreign, or other issues with an average duration of greater than or equal to 3.5 years but less than or equal to six years, or an average effective maturity of more than four years but less than 10 years.

Short-Term Bond
A fund that focuses on corporate and other investment-grade issues with an average duration of more than one year but less than 3.5 years, or an average effective maturity of more than one year but less than four years.

Ultrashort Bond
Used for funds with an average duration or an average effective maturity of less than one year. This category includes general- and government-bond funds, and excludes any international, convertible, multisector, and high-yield bond funds.

Bank Loan
funds that invest primarily in floating-rate bank loans instead of bonds. In exchange for their credit risk, they offer high interest payments that typically float above a common short-term benchmark.

World Bond
A fund that invests at least 40% of bonds in foreign markets.

Emerging-Markets Bond
A fund that invests at least 65% of assets in emerging-markets bonds.

High-Yield Bond
A fund with at least 65% of assets in bonds rated below BBB.

Multisector Bond
Used for funds that seek income by diversifying their assets among several fixed-income sectors, usually U.S. government obligations, foreign bonds, and high-yield domestic debt securities.

Municipal-Bond Funds

Municipal National Long-Term
A national fund with an average duration of more than seven years, or average maturity of more than 12 years.

Municipal National Intermediate-Term
A national fund with an average duration of more than 4.5 years but less than seven years, or average maturity of more than five years but less than 12 years.

High-Yield Municipal
A fund that invests at least 50% of assets in high-income municipal securities that are not rated or that are rated by a major rating agency at the level of BBB (considered speculative in the municipal industry) or below.

Municipal National Short
A fund that focuses on municipal bonds with an average duration of less than 4.5 years, or an average maturity of less than five years.

State-Specific Munis
A municipal-bond fund that primarily invests in one specific state. These funds must have at least 80% of assets invested in municipal bonds from that state. Each state-specific muni category includes long, intermediate, and short-duration bond funds. State-specific funds that do not fall into one of the below categories will occupy either the Muni Single State Long-Term or Muni Single State Intermediate/Short category.

Muni California Intermediate/Short
Muni California Long-Term
Muni Florida
Muni Massachusetts
Muni Minnesota
Muni New Jersey
Muni New York Intermediate/Short
Muni New York Long-Term
Muni Ohio
Muni Pennsylvania

This is a proprietary Morningstar data point. The Morningstar Rating for Stocks is calculated by comparing a stock's current market price with Morningstar's estimate of the stock's fair value. Our rating system also includes an uncertainty adjustment, so that it's more difficult for a company to earn a 5-star rating the more uncertain we are of our fair value estimate.

Under our system, 3-star stocks are those that should offer a "fair return," one that adequately compensates for the riskiness of the stock. Three-star stocks should offer investors a return that's roughly comparable to the stock's cost of equity. (The cost of equity is often called a "required return" because it represents the return an investor requires for taking on the risk of owning the stock.)

Five-star stocks, of course, should offer an investor a return that's well above the company's cost of equity. Conversely, low-rated stocks have significantly lower expected returns.

The Morningstar Rating for Stocks also includes a small buffer around the cutoff between each rating, to reduce the number of rating changes produced by random market "noise." If a $50 stock moves up and down by $0.25 each day over a few days, the buffer will prevent the star rating from changing each day based on this insignificant change.

This is a proprietary Morningstar data point. The Morningstar stock-grading system consists of three grades, one in each of the following categories: Growth, Profitability, and Financial Health. They're meant to be a quick way to get a handle on a company's fundamentals.

All grades are based on relative rankings of companies within their sector. Morningstar uses the 12 Morningstar sectors. For example, a company in the financial services sector that receives an "A" in growth is a company that ranks near the top of the financial services sector in terms of growth. Sector comparisons are used to make sure comparisons are apples to apples.

The grades are based solely on the numbers reported by the company in its SEC filings. Due to accounting conventions, however, these grades may or may not reflect the underlying economic reality, and investors should view the grades as a starting point for analysis rather than a definitive judgment on the company. No Morningstar analyst makes a subjective call as to what grade a company should get.

Distribution of grades: Within each sector for each of the three categories (growth, profitability, and financial health), Morningstar gives equal numbers of companies As, Bs, Cs, and Ds, while the bottom 10% get Fs.

Note that there's no grade inflation. A grade of "C" means a company ranks right around the middle of its sector. It's therefore very tough to get straight "A"s.

All information used to calculate the grades comes from Morningstar's internal equities database.

Growth Grade
The growth grade consists of three components, which are weighted to arrive at an overall growth grade:

Raw Growth
Morningstar looks at historical sales growth over the past five years. The faster a company's growing, the better.

Trend
Morningstar rewards companies whose sales growth is speeding up and punish those whose sales growth is slowing down.

Consistency
Morningstar rewards companies with steady year-by-year sales growth over the past five years, and punish those with volatile sales growth.

Profitability Grade
The profitability grade consists of three components, which are weighted to arrive at an overall profitability grade:

Raw Profitability
Morningstar looks at the average level of a company's returns on capital over the past five years. The higher the better.

Trend
Morningstar rewards companies whose returns on capital are trending upward.

Consistency
Morningstar rewards companies with consistent returns on capital, and punish those with volatile profits.

Financial Health Grade The financial-health grade consists of two components, which are weighted to arrive at an overall financial-health grade.

Raw Financial Health
Morningstar looks at financial leverage (assets/equity) from the most recent quarter's balance sheet, cash on the balance sheet, cash flows, and free cash flows to arrive at a financial-health grade.

Trend
Morningstar punishes companies with deteriorating financial health.

This is a proprietary Morningstar data point. The Morningstar Style Box is a nine-square grid that provides a graphical representation of the "investment style" of stocks and mutual funds. For stocks and stock funds, it classifies securities according to market capitalization (the vertical axis) and growth and value factors (the horizontal axis). Fixed income funds are classified according to credit quality (the vertical axis) and sensitivity to changes in interest rates (the horizontal axis).

By providing an easy-to-understand visual representation of stock and fund characteristics, the Morningstar Style Box allows for informed comparisons and portfolio construction based on actual holdings, as opposed to assumptions based on a fund's name or how it is marketed. The Style Box also forms the basis for Morningstar's style-based fund categories and market indexes.

How It Works
The vertical axis of the Style Box defines three size categories, or capitalization bands-small, mid-size, and large. The horizontal axis defines three style categories. Two of these categories, "value" and "growth," are common to both stocks and funds. However, for stocks, the central column of the style box represents the core style (those stocks for which neither value or growth characteristics dominate); for funds, it represents the blend style (a mixture of growth and value stocks or mostly core stocks).

Style Box assignments begin at the individual stock level. Morningstar determines the investment style of each individual stock in its database. Stocks are evaluated against other stocks in the same geographic area (United States, Latin America, Canada, Europe, Japan, Asia ex-Japan, Australia/New Zealand). The style attributes of individual stocks are then used to determine the style classification of stock mutual funds.

The Horizontal Axis
The scores for a stock's value and growth characteristics determine its horizontal placement:

Value Score Components and Weights

Forward looking measures 50.0%
Price/Prospective Earnings.

Historical based measures 50.0%
Price/book 12.5% Price/sales 12.5% Price/cash flow 12.5% Dividend yield 12.5%

Growth Score Components and Weights

Forward looking measures 50.0%
Long-term projected earnings growth

Historical-based measures 50.0%
Historical earnings growth 12.5% Sales growth 12.5% Cash flow growth 12.5% Book value growth 12.5%

Growth and value characteristics for each individual stock are compared to those of other stocks within the same capitalization band and are scored from zero to 100 for both value and growth. To determine the overall style score, the value score is subtracted from the growth score.

The resulting number can range from 100 (for low-yield, extremely growth-oriented stocks) to -100 (high-yield, low-growth stocks). A stock is classified as growth if the net score equals or exceeds the "growth threshold" (normally about 25 for large-cap stocks). It is deemed value if its score equals or falls below the "value threshold "(normally about -15 for large-cap stocks). And if the score lies between the two thresholds, the stock is classified as "core."

The thresholds between value, core, and growth stocks vary to some degree over time, as the distribution of stock styles changes in the market. However, on average, the three stock styles each account for approximately one third of the total free float in each size category.

The Vertical Axis

Rather than a fixed number of "large cap"or "small cap" stocks, Morningstar uses a flexible system that isn't adversely affected by overall movements in the market. Large-cap stocks are defined as the group that accounts for the top 70% of the capitalization of each geographic area; mid-cap stocks represent the next 20%; and small-cap stocks represent the balance.

Moving from Individual Stocks to Funds
A stock fund is an aggregation of individual stocks and its style is determined by the style assignments of the stocks it owns. 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.

Fixed-Income Style Box
Domestic and international fixed-income funds focus on the two pillars of fixed-income performance: interest-rate sensitivity and credit quality. Morningstar splits fixed-income funds into three groups of interest rate sensitivity (high, medium, and low) and three credit-quality groups (high, medium, and low). These groupings graphically display a portfolio's average effective duration and credit quality. As with equity funds, nine possible combinations exist, ranging from short maturity/high quality for the safest funds to long maturity/low quality for the more volatile.

Along the horizontal axis of the style box lies the average term length of a fund's bond portfolio based on average effective duration. This figure, which is calculated by the fund companies, weights each bond's duration by its relative size within the portfolio. Duration provides a more accurate description of a bond's true interest-rate sensitivity than does maturity because it takes into consideration all mortgage prepayments, puts, and adjustable coupons. Funds with an average effective maturity of less than 3.5 years qualify as short term. Funds with bonds that have an average effective duration greater than or equal to 3.5 years but less than or equal to 6 years are categorized as intermediate, and those with maturity that exceeds 6 years are long term. (The duration ranges vary slightly for municipal-bond funds: Less than 4.5 years is short term; 4.5 to 7 years is intermediate; and greater than 7 years is long term.)

If duration data are not available, Morningstar will use average effective maturity figures to calculate the fund's style box. Although duration is the more accurate measurement, maturity can also be used to gauge the amount of interest-rate risk in a fund's portfolio. Funds with bonds that have an average effective maturity of less than 4 years qualify as short term. Funds with an average effective maturity greater than or equal to 4 years but less than or equal to 10 years are categorized as intermediate, and those with maturity that exceeds 10 years are long term.

Along the vertical axis of a fixed-income style box lies the average quality rating of a bond portfolio. Funds that have an average credit rating of AAA or AA are categorized as high quality. Bond portfolios with average ratings of A or BBB are medium quality, and those rated below BB are categorized as low quality. For the purposes of Morningstar's calculations, U.S. government securities are considered AAA bonds, nonrated municipal bonds generally are classified as BB, and all other nonrated bonds are considered B.

For hybrid funds, both equity and fixed-income style boxes appear.

Using the Style Box
In general, a growth-oriented fund will hold the stocks of companies that the portfolio manager believes will increase earnings faster than the rest of the market. A value-oriented fund contains mostly stocks the manager thinks are currently undervalued in price and will eventually see their worth recognized by the market. A blend fund might be a mix of growth stocks and value stocks, or it may contain stocks that exhibit both characteristics.

Understanding how different types of stocks behave is crucial for building a diversified, style-controlled portfolio of stocks or mutual funds. The Morningstar Style Box helps investors construct portfolios based on the characteristics-the style factors-of all the stocks and funds that portfolio includes.