Mutual Funds: Data Definitions: Portfolio

 Equity Investment Style

Ownership Zone

The Morningstar Ownership ZoneSM provides a graphic and intuitive representation of the size and investment style of stocks in an equity portfolio. The Ownership Zone is derived by plotting each stock in the portfolio within the Morningstar Style Box. The Ownership Zone is the shaded area that represents 75% of the assets in the portfolio and indicates the level of concentration in the holdings. The “centroid” in the middle of the Ownership Zone represents the weighted average of all the holdings. The Ownership Zone helps investors differentiate between portfolios that may otherwise look similar. Investors can also use the Ownership Zone to construct diversified portfolios and model how multiple funds complement one other in a portfolio.

Morningstar Style Box Overview

The Equity Style Box is a nine-box matrix that displays the weighted portfolio stock and mutual fund investment methodology and the size of the companies in which they invest. Combining these two variables offers a broad view of a portfolio's equity holdings and risk. For a complete explanation of how we calculate the Equity Style Box for stocks and stock funds, see the Morningstar Style Box topic.


The following are the five value factors used to calculate the Morningstar Style Box.

Growth Rates

The following are the five growth factors used to calculate the Morningstar Style Box. For portfolios, these figures are share-weighted averages of all the stocks in the current portfolio, because the share-weighted average is more accurate than an asset-weighted average for these types of calculations.

Geometric Average Capitalization ($Mil)

Morningstar defines the overall "size" of a stock fund's portfolio as the geometric mean of the market capitalization for all of the stocks it owns. It's calculated by raising the market capitalization of each stock to a power equal to that stock's stake in the portfolio. The resulting numbers are multiplied together to produce the geometric mean of the market caps of the stocks in the portfolio, which is reported as geometric average cap.

This number is different from the fund's median market cap—the capitalization of the median stock in its portfolio. The geometric average cap better identifies the portfolio's "center of gravity." That is, it provides more accurate insight into how market trends (as defined by capitalization) might affect the portfolio.

Investment Style History (Morningstar Style Box)

The Morningstar Style Box is a nine-square grid that provides a graphical representation of the investment style of stocks and 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).


 Fixed-Income Investment Style

Style Summary

Listed for both domestic and international fixed-income funds, with the exception of convertible-bond funds. The data focus on the two pillars of fixed-income performance: interest-rate sensitivity and credit quality. Morningstar splits fixed-income funds into three duration groups: limited (Ltd), moderate (Mod), and extensive (Ext), and three credit quality groups: high- (H), medium- (M), and low-quality (L).

These groupings display a portfolio’s effective duration and credit quality to provide an overall representation of the fund’s risk, given the length and quality of bonds in its portfolio. As with equity funds, nine possible combinations exist, ranging from short duration/high quality for the safest funds to long duration/low quality for the riskiest.

Bond Statistics

Bond Quality

The credit analysis depicts the quality of bonds in the fund's portfolio. The analysis reveals 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 AAA bonds. U.S. government bonds are also included within the AAA category (effective 6/30/06). Bonds with a B rating are the lowest bonds that are still considered to be of investment grade. Bonds that are rated lower than B (often called junk bonds or high-yield bonds) are considered to be quite speculative. Any bonds that appear in the NR/NA category are either not rated by Standard & Poor's or Moody's, or do not currently have a rating available.


 Asset Allocation

This section shows the weighting of the portfolio in Cash,  U.S. Stock, Non-U.S. Stock, Bonds and Other. Other includes securities that are not neatly classified in the other asset classes, such as convertible bonds and preferred stocks.

How do I interpret the bar graph?

 Sector Weightings (stock funds only)

Depending on your institution, you may see either the Morningstar Sectors or S&P Sector Weightings in Morningstar Advisor Workstation.

Morningstar Sectors:

S&P Sector Weightings:


 International Exposure ( international stock funds only)

Regional Exposure

This data set provides a broad breakdown of a fund's geographical exposure. Each region's exposure is presented as a percentage of non-cash equity assets held by the fund. Regional exposure information summarizes a portfolio's exposure to geopolitical risk. It also provides a reference point for understanding fund returns. Some fund managers follow a "top down" discipline, where they direct their investments into regions they consider good opportunities.

For stock funds, regional exposure is calculated as a percentage of stocks; for bond funds, the data is available for international bond funds only, and is culled from quarterly surveys.

Morningstar’s regions are classified into the geographic regions. The regions are then folded into three super geographic regions of the Americas, Greater Europe and Greater Asia. They are based on the following three criteria:

Country Exposure

Displays the countries in which the fund invests most heavily. This information is gathered from fund companies and is the most recent data available.


 Top 25 Holdings

Top Holdings

The top holdings in the fund’s portfolio are ranked by % Net Assets.

Note about portfolio dates  (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.