Morningstar ® Investment Profile™: Mutual Fund Data Definitions

 

Snapshot  

 

 Performance

 

Growth of $10,000 Graph
The Growth of $10,000 graph shows a fund's performance based on how $10,000 invested in the fund would have grown over time. The returns used in the graph are not load-adjusted. The growth of $10,000 begins at the date of the fund's inception, or the first year listed on the graph, whichever is appropriate. Located alongside the fund's graph line is a line that represents the growth of $10,000 in either the S&P 500 index (for stock funds and hybrid funds) or the LB Aggregate index (for bond funds). The third line represents the fund's Morningstar category (see definition below). These lines allow investors to compare the performance of the fund with the performance of a benchmark index and the fund's Morningstar category. Both lines are plotted on a logarithmic scale, so that identical percentage changes in the value of an investment have the same vertical distance on the graph.

For example, the vertical distance between $10,000 and $20,000 is the same as the distance between $20,000 and $40,000 because both represent a 100% increase in investment value. This provides a more accurate representation of performance than would a simple arithmetic graph. The graphs are scaled so that the full length of the vertical axis represents a tenfold increase in investment value. For securities with returns that have exhibited greater than a tenfold increase over the period shown in the graph, the vertical axis has been compressed accordingly.

Annual Returns
Total returns calculated on a calendar-year basis. Total return includes both income (in the form of dividends or interest payments) and capital gains or losses(the increase or decrease in the value of a security). Morningstar calculates total return by taking the change in a fund's NAV, assuming the reinvestment of all income and capital gains distributions (on the actual reinvestment date used by the fund) during the period, and then dividing by the initial NAV. Unless marked as load-adjusted total returns, Morningstar does not adjust total return for sales charges or for redemption fees. Total returns do account for management, administrative, and 12b-1 fees and other costs automatically deducted from fund assets.

+/- S&P 500 or +/- LB Aggregate
A benchmark index gives the investor a point of reference for evaluating a fund's performance. In all cases where such comparisons are made, Morningstar uses the S&P 500 as the primary benchmark for stock-oriented funds, and the Lehman Brothers Aggregate Bond index (an overall bond benchmark) as the benchmark index for bond funds. The +/- (Calendar Year) figure indicates the amount by which a fund over- or underperformed its primary index during a given calendar year.

+/- Category
The Morningstar category gives the investor a point of reference for evaluating a fund's performance (see the Morningstar category definition below). The +/- (Calendar Year) figure indicates the amount by which a fund over- or underperformed its category during a given calendar year.


 

 Key Stats

 

Morningstar Category
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. We place 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, we estimate where it will fall before giving it a more permanent category assignment. When necessary, we may change a category assignment based on recent changes to the portfolio.

Stock Funds
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 Equity Style Box 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, small 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, and convertible bond. (Precious-metals funds are assigned star ratings in the international-stock asset class.)

Finally, Morningstar also has domestic-stock categories covering:
Conservative Allocation: A fund that invests in both stocks and bonds and maintains a relatively smaller position in stocks. The funds typically have 20 percent to 50 percent of assets in equities and 50 percent to 80 percent of assets in fixed income and cash.

Moderate Allocation: A fund that invests in both stocks and bonds and maintains a higher position in stocks. The funds typically have 50 percent to 70 percent of assets in equities and the remainder in fixed income 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 an international-stock category.
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 Large Value: Foreign large-value funds invest mainly in big international stocks that are less expensive than the market as a whole. Most of these funds divide their assets among a dozen or more developed markets, including Japan, Britain, France, and Germany. They tend to invest the rest in emerging markets such as Hong Kong, Brazil, Mexico and Thailand. These funds typically will have less than 20% of assets invested in U.S. stocks.

Foreign Large Blend: Foreign large-blend funds invest in a variety of big international stocks. Most of these funds divide their assets among a dozen or more developed markets, including Japan, Britain, France, and Germany. They tend to invest the rest in emerging markets such as Hong Kong, Brazil, Mexico and Thailand. These funds typically will have less than 20% of assets invested in U.S. stocks.

Foreign Large Growth: Foreign large-growth funds focus on high-priced growth stocks, mainly outside of the United States. Most of these funds divide their assets among a dozen or more developed markets, including Japan, Britain, France, and Germany. They tend to invest the rest in emerging markets such as Hong Kong, Brazil, Mexico and Thailand. These funds typically will have less than 20% of assets invested in U.S. stocks.

Foreign Small-/Mid-Value: Foreign small-/mid-value funds invest in international stocks that are smaller and less expensive than the market as a whole. Most of these funds divide their assets among a dozen or more developed markets, including Japan, Britain, France, and Germany. These funds typically will have less than 20% of assets invested in U.S. stocks.

Foreign Small-/Mid-Growth: Foreign small-/mid-growth funds invest in international stocks that are smaller and higher-priced than the market as a whole. Most of these funds divide their assets among a dozen or more developed markets, including Japan, Britain, France, and Germany. These funds typically will have less than 20% of assets invested in U.S. stocks.

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.

Stable Value: funds that seek to provide income while preventing price fluctuations. The most common stable-value portfolios invest in a diversified portfolio of bonds and enter into wrapper agreements with financial companies to guarantee against fluctuations in their share prices. These wrapper agreements typically provide price stability on a day-to-day basis, thereby insulating each portfolio's net asset value from interest-rate volatility. Therefore, their true overall durations are effectively zero.

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

Emerging-Markets Bond: at least 65% 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 Muni: A fund that invest at least 50 percent 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 debt/bonds with an average duration of less than 4.5 years, or an average maturity of less than five years.

High Yield Muni: A fund that invest at least 50 percent 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.

State-specific munis: A municipal bond fund that primarily invest in one specific state. These funds must have at least 80 percent 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

Morningstar Rating for Funds
Morningstar rates mutual funds from one to five stars based on how well they've performed (after adjusting for risk and accounting for all sales charges) in comparison to similar funds. Within each Morningstar Category, the top 10% of funds receive five stars, the next 22.5% four stars, the middle 35% three stars, the next 22.5% two stars, and the bottom 10% receive one star. Funds are rated for up to three time periods--three-, five-, and 10 years--and these ratings are combined to produce an overall rating. Funds with less than three years of history are not rated. Ratings are objective, based entirely on a mathematical evaluation of past performance. They're a useful tool for identifying funds worthy of further research, but shouldn't be considered buy or sell recommendations.

NAV
A fund's net asset value (NAV) represents its per-share price. A fund's NAV is derived by dividing the total net assets of the fund, less fees and expenses, by the number of shares outstanding.

Day Change
The change in the price of the fund during the prior business day.

Total Assets
This figure is recorded in millions of dollars and represents the fund's total asset base.

Expense Ratio %
The percentage of fund assets paid for operating expenses and management fees, including 12b-1 fees, administrative fees, and all other asset-based costs incurred by the fund, except brokerage costs. Fund expenses are reflected in the fund's NAV. Sales charges are not included in the expense ratio.

Benefits
The expense ratio is useful because it shows the actual amount that a fund takes out of its assets each year to cover its expenses. Investors should note not only the current expense-ratio figure, but also the trend in these expenses; it could prove useful to know whether a fund is becoming cheaper or more costly. When considering high expenses vs. low expenses, potential investors must also consider the fund's objective and its size. Certain objectives, such as foreign-equity funds, have higher costs and, therefore, higher expense ratios. As for size, smaller funds are normally costlier than larger funds, because they do not have the benefits of economies of scale.

Front-end Load
The initial, or front-end, sales charge is a one-time deduction from an investment made into the fund. The amount is generally relative to the amount of the investment, so that larger investments incur smaller rates of charge. The sales charge serves as a commission for the broker who sold the fund.

Deferred Load
These are also known as back-end sales charges and are imposed when investors redeem shares. The percentage charged generally declines the longer shares are held. This charge, often coupled with 12b-1 fees as an alternative to a traditional front-end load, diminishes over time.

Yield
Yield, expressed as a percentage, represents a fund's income return on capital investment for the past 12 months. This figure refers only to interest distributions from fixed-income securities, dividends from stocks, and realized gains from currency transactions. Monies generated from the sale of securities or from options and futures transactions are considered capital gains, not income. Return of capital is also not considered income NMF--or No Meaningful Figure--appears in this space for those funds that do not properly label their distributions. We list N/A if a fund is less than one year old, in which case we cannot calculate yield.

Morningstar computes yield by dividing the sum of the fund's income distributions for the past 12 months by the previous month's NAV (adjusted upward for any capital gains distributed over the same time period).

Manager Name
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 just 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 management player.

 

 Portfolio Analysis

 

MORNINGSTAR STYLE BOX

The Morningstar Style BoxT was introduced in 1992 to help investors and advisors determine the investment style of a fund. The equity Style Box is a nine-square grid that classifies securities by size along the vertical axis and by value and growth characteristics along the horizontal axis. Different investment styles often have different levels of risk and lead to differences in returns. Therefore, it is crucial that investors understand style and have a tool to measure their style exposure. For the Fixed-Income Morningstar Style Box, see Fixed-Income Style Box.

Benefits
Morningstar's equity style methodology uses a "building block," holdings-based approach that is consistent with Morningstar's fundamental approach to investing. Style is first determined at the stock level and then those attributes are "rolled up" to determine the overall investment style of a fund or portfolio. This unified framework can link what are often treated as separate processes-stock research, fund research, portfolio assembly, and market monitoring-in the belief that a shared analytical framework will lead to better portfolio construction and fund usage.

Morningstar uses 10 different stock characteristics to measure value and growth, and this produces more accurate and stable stock and portfolio style assignments. Morningstar uses both forward-looking and historical-based components to ensure that information available to active portfolio managers is incorporated in the model. This robust approach to style analysis is a powerful lens for understanding stocks, funds, and portfolios.

The Morningstar Style Box is applicable in all equity markets. A geographic framework ensures that style assignments are relevant to local investors everywhere. As of March 31, 2004, all U.S. and non-U.S. stocks and portfolios are evaluated under the same style methodology. This methodology was originally introduced in May 2002 for U.S. stocks and portfolios only.

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

The Morningstar Style Box helps investors construct diversified, style-controlled portfolios based on the style characteristics of all the stocks and funds included in that portfolio.

Origin
Morningstar generates Style Boxes for stocks and portfolios in-house, using data culled from our internal databases. Style Box assignments for stocks are updated each month. Style Box assignments for portfolios are recalculated whenever Morningstar receives updated holdings for the portfolio.

The Style Box also forms the basis for the style-based Morningstar Categories and market indexes.

For the Pros
The Morningstar Style Box captures three of the major considerations in equity investing: size, security valuation and security growth. Value and growth are measured separately because they are distinct concepts. A stock's value orientation reflects the price that investors are willing to pay for some combination of the stock's anticipated per-share earnings, book value, revenues, cash flow, and dividends. A high price relative to these measures indicates that a stock's value orientation is weak, but it does not necessarily mean that the stock is growth-oriented. Instead, a stock's growth orientation is independent of its price and reflects the growth rates of fundamental variables such as earnings, book value, revenues, and cash flow. When neither value nor growth is dominant, stocks are classified as "core" and portfolios are classified as "blend."

Stock Size Score: Vertical Axis
Rather than using 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. World equity markets are first divided into seven style zones:

United States
Latin America
Canada
Europe
Japan
Asia ex-Japan
Australia/New Zealand
The stocks in each style zone are further subdivided into size groups. Giant-cap stocks are defined as those that account for the top 40% of the capitalization of each style zone; large-cap stocks represent the next 30%; mid-cap stocks represent the next 20%; small-cap stocks represent the next 7% and micro-cap stocks represent the smallest 3%. For value-growth scoring, giant-cap stocks are included with the large-cap group for that style zone, and micro-caps are scored against the small-cap group for that style zone.

Stock Style Score: Horizontal Axis
The scores for a stock's value and growth characteristics determine its horizontal placement. There are five value factors and five growth factors, which are listed below.

Value Score Components and Weights
Forward Looking

Price/Projected Earnings 50.0%
Historical-Based Measures
Price/Book 12.5%
Price/Sales 12.5%
Price/Cash Flow 12.5%
Dividend Yield 12.5%

Growth Score Components and Weights
Forward Looking

Long-term Projected Earnings Growth 50.0%
Historical-Based Measures
Book Value Growth 12.5%
Sales Growth 12.5%
Cash Flow Growth 12.5%
Historical Earnings Growth 12.5%

The five value and five growth characteristics for each individual stock are compared to those of other stocks within the same scoring group (groups based on style zone and size, e.g. Europe large-caps). Stocks are then assigned Overall Value and Overall Growth scores based on the ten factors. If either growth or value is dominant, the stock is classified accordingly. If the scores for value and growth are similar in strength, 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 each style zone. However, on average, the three stock styles each account for approximately one-third of the total capitalization in each scoring group.

Moving from Individual Stocks to Portfolios
A stock fund or portfolio is an aggregation of individual stocks and its style is determined by the style assignments of the stocks it owns. Style Box assignments for portfolios are based on the asset-weighted average of the style and size scores of the underlying stocks. Few or no portfolios contain only stocks with extreme value-growth orientations, and both value and growth managers often hold core stocks for diversification or other reasons. Therefore, for portfolios, the central column of the Style Box represents the "blend" style (a mixture of growth and value stocks or mostly core stocks).

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 six years are categorized as intermediate, and those with maturity that exceeds six years are long term. (The duration ranges vary slightly for municipal-bond funds: Less than 4.5 years is short term; 4.5 to seven years is intermediate; and greater than seven 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 four years qualify as short term. Funds with an average effective maturity greater than or equal to four 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.

Portfolio Date (explanation of reporting frequency)
Morningstar makes every effort to gather the most up-to-date portfolio information from a fund. By law, however, funds need only report this information two times during a calendar year, and they have two months after the report date to actually release the shareholder report and portfolio. Therefore, it's possible that a fund's portfolio could be up to eight months old at the time of publication. We print the date the portfolio was reported.

Older portfolios should not be disregarded, however. Although the data may not represent the exact current holdings of the fund, it may still provide a good picture of the overall nature of the fund's management style.  

Asset Allocation

% Cash
This data point identifies the percentage of the fund's net assets held in cash. Cash encompasses both actual cash and cash equivalents (fixed-income securities with a maturity of one year or less) held by the portfolio plus receivables minus payables. Negative percentages of cash indicate that the portfolio is leveraged, meaning it has borrowed against its own assets to buy more securities or that it has used other techniques to gain more than 100% exposure to the market.

% Stocks
The percentage listed under the heading Stocks incorporates only the portfolio's straight common stock holdings.

% Bonds
This data point identifies the percentage of the fund's net assets held in bonds. Bonds include everything from government notes to high-yield corporate bonds.

% Other
Other includes preferred stocks (equity securities that pay dividends at a specific rate) as well as convertible bonds and convertible preferreds, which are corporate securities that are exchangeable for a set amount of another form of security (usually common shares) at a prestated price. Other also may denote holdings in not-so-neatly-categorized securities, such as warrants and options.

Turnover Ratio
This is a measure of the fund's trading activity which is computed by taking the lesser of purchases or sales (excluding all securities with maturities of less than one year) and dividing by average monthly net assets. A turnover ratio of 100% or more does not necessarily suggest that all securities in the portfolio have been traded. In practical terms, the resulting percentage loosely represents the percentage of the portfolio's holdings that have changed over the past year. Benefits: A low turnover figure (20% to 30%) would indicate a buy-and-hold strategy. High turnover (more than 100%) would indicate an investment strategy involving considerable buying and selling of securities. Origin: Morningstar does not calculate turnover ratios. The figure is culled directly from the financial highlights of the fund's annual report.

% Assets in Top 10
The aggregate assets, expressed as a percentage, of the fund's top 10 portfolio holdings. This figure is meant to be a measure of portfolio risk. Specifically, the higher the percentage, the more concentrated the fund is in a few companies or issues, and the more the fund is susceptible to the market fluctuations in these few holdings. The figure is calculated from the most recent available fund holdings. Benefits: The Percent Assets in Top 10 Holdings figure provides insight into the degree to which a portfolio is diversified. Used in combination with the total number of holdings, it can indicate how concentrated a fund is. Origin: This figure is calculated in-house, using the most recent portfolio we have available for the fund. It currently counts cash as a holding.

Sector Breakdown %
Basic Materials - Companies that manufacture chemicals, building materials and paper products. This sector also includes companies engaged in commodities exploration and processing. Companies in this sector include ArcelorMittal, BHP Billiton and Rio Tinto.
 
Consumer Cyclical - This sector includes retail stores, auto and auto parts manufacturers, companies engaged in residential construction, lodging facilities, restaurants and entertainment companies. Companies in this sector include Ford Motor Company, McDonald's and News Corporation.
 
Financial Services - Companies that provide financial services which includes banks, savings and loans, asset management companies, credit services, investment brokerage firms, and insurance companies. Companies in this sector include Allianz, J.P. Morgan Chase and Legg Mason.
 
Real Estate - This sector includes mortgage companies, property management companies and REITs. Companies in this sector include Kimco Realty Corporation, Vornado Realty Trust and Westfield Group.
 
Consumer Defensive - Companies engaged in the manufacturing of food, beverages, household and personal products, packaging, or tobacco. Also includes companies that provide services such as education & training services. Companies in this sector include Philip Morris International, Procter & Gamble and Wal-Mart Stores.
 
Healthcare - This sector includes biotechnology, pharmaceuticals, research services, home healthcare, hospitals, long-term care facilities, and medical equipment and supplies. Companies in this sector include Astra Zeneca, Pfizer and Roche Holding.
 
Utilities - Electric, gas, and water utilities. Companies in this sector include Electricité de France, Exelon and PG&E Corporation.
 
Communication Services - Companies that provide communication services using fixed-line networks or those that provide wireless access and services. This sector also includes companies that provide internet services such as access, navigation and internet related software and services. Companies in this sector include AT&T, France Telecom and Verizon Communications.
 
Energy - Companies that produce or refine oil and gas, oil field services and equipment companies, and pipeline operators. This sector also includes companies engaged in the mining of coal. Companies in this sector include BP, ExxonMobil and Royal Dutch Shell.
 
Industrials - Companies that manufacture machinery, hand-held tools and industrial products. This sector also includes aerospace and defense firms as well as companied engaged in transportations and logistic services. Companies in this sector include 3M, Boeing and Siemens.
 
Technology - Companies engaged in the design, development, and support of computer operating systems and applications. This sector also includes companies that provide computer technology consulting services. Also includes companies engaged in the manufacturing of computer equipment, data storage products, networking products, semi¬conductors, and components. Companies in this sector include Apple, Google and Microsoft.

Top 3 Credit Weightings
For corporate-bond and municipal-bond funds, the credit weightings depict the quality of bonds in the fund's portfolio. The weightings reveal the percentage of fixed-income securities that fall within each credit-quality rating as assigned by Standard & Poor's or Moody's. At the top of the ratings are U.S. government bonds. Bonds issued and backed by the federal government are of extremely high quality and thus are considered superior to bonds rated AAA, which is the highest possible rating a corporate issue can receive. Morningstar gives U.S. government bonds a credit rating separate from AAA securities to allow for a more accurate credit analysis of a portfolio's holdings. Bonds with a BBB rating are the lowest bonds that are still considered to be of investment-grade. Bonds that are rated BB or lower (often called junk bonds or high-yield bonds) are considered to be quite speculative. Any bonds that appear in the Not Rated or Not Available category are either not rated by Standard & Poor's or Moody's, or do not have a rating available at this time.

 

 

 Top 5 Holdings

 

These are the top 5 holdings in the fund's portfolio ranked by the % of net assets.

YTD Return %
The holding's YTD return through the last close.

% of Net Assets
Morningstar calculates the percentage of net assets figure by dividing the market value of the security by the fund's total net assets. If a few securities take up a large percentage of the fund's net assets, the fund uses a concentrated portfolio strategy. If the percentage figures are low, then the manager is not willing to bet heavily on any particular security.

 



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