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Asset Allocation
Pie chart: If there are no liability positions in the account, this pie chart appears. If there are liability positions, a bar chart appears.
Bar chart: When plotting a composition segment on the bar chart, the overall percent of both assets and liabilities is drawn. The net position is noted with a solid line. The graph's center indicates 0; the values above the net position represent negative positions, and the values above the net position represent positive values.
The values for the account and the benchmark in the graph legend are net values.
Assets & Liabilities
The positions for both the assets and liabilities are broken into the following areas:
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.
U.S. Stocks: Includes only the portfolio’s common domestic stocks.
Non-U.S. Stocks: Includes only the portfolio’s common non-domestic stocks.
Bonds: includes everything from government notes to high-yield corporate bonds.
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 pre-stated price. Other also denotes all those not-so-neatly categorized securities, such as warrants and options.
Not Classified: Not all individual stocks or all securities in fund portfolios can be identified or classified by Morningstar. If a security cannot be identified or classified, it will be reflected in this number.
Investment Style
Equity Ownership Zone
For accounts, Ownership Zones provide a quick visual representation of an account's style as a whole, as well as a picture of how diversified the underlying holdings of the account are across styles.
The account centroid represents the weighted average of all the underlying holdings in a portfolio.
Each holding in the account is represented by a different dot in the Ownership Zone graphic, blue for managed products, gray for stocks. The size variations of the dots give you a quick idea of how much weight the holding takes up in the account as a whole.
Equity Style
This section displays the percentage of total stock holdings within the account that fall into each of the nine areas of the Equity Style Box. This calculation excludes cash, bonds and not classified holdings. After determining the equity style of each stock or fund, we sum the weights (%) of the holdings with the same style. This equals the total weighting for that particular investment style among the account's stock holdings.
The Equity Style Box is a nine-box matrix that displays the weighted account 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 an account's equity holdings and risk.
Fixed-Income Style
This section displays the percentage of total bond holdings within the account that fall into each of the nine areas of the Fixed-Income Style Box. This calculation excludes cash, stocks and not classified holdings. After determining the fixed-income style of each bond and bond fund, we sum the weights (%) of the holdings with the same style. This equals the total weighting for that particular investment style among the account's bond holdings.
Domestic and international fixed-income funds feature their own style boxes, which 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, <3.5 years; Moderate, >3.5 to 6 years; and Extensive, > 6 years) and three credit-quality groups (High, AAA or AA; Medium, A or BBB; and Low, BB and below). These groupings graphically display an account's average maturity and credit quality. Nine possible combinations exist, ranging from extensive maturity/high quality for the safest funds to limited maturity/low quality for the more volatile.
Average Effective Duration (Years): A measure of a fund's interest-rate sensitivity—the longer a fund's duration, the more sensitive the fund is to shifts in interest rates. Duration is determined by a formula that includes coupon rates and bond maturities. The relationship between funds with different durations is straightforward: A fund with a duration of 10 years is twice as volatile as a fund with a five-year duration. Morningstar prints an average effective duration statistic that incorporates call, put, and prepayment possibilities.
Average Effective Maturity (Years): Average effective maturity takes into consideration all mortgage prepayments, puts, calls, and adjustable coupons, and other features of individual bonds. The number listed is a weighted average of all the maturities of the bonds in the account, computed by weighing each maturity date (the date the security comes due) by the market value of the security.
Average Credit Quality: An average of each bond’s credit rating, adjusted for its relative weighting in the account.
Stock Sectors
Morningstar divides the economy into three super sectors and 11 sub-sectors. Read the global equity classification methodology.
Cyclical
The cyclical super sector includes industries significantly impacted by economic shifts. When the economy is prosperous these industries tend to expand and when the economy is in a downturn these industries tend to shrink. In general, the stocks in these industries have betas of greater than 1.
The cyclical super sector is made up of the following sectors:
Sensitive
The sensitive super sector includes industries which ebb and flow with the overall economy, but not severely so. Sensitive industries fall between the defensive and cyclical industries as they are not immune to a poor economy but they also may not be as severely impacted by a poor economy as industries in the cyclical super sector. In general, the stocks in these industries have betas that are close to 1.
The sensitive super sector is made up of the following sectors:
Defensive
The defensive super sector includes industries that are relatively immune to economic cycles. These industries provide services that consumers require in both good and bad times, such as healthcare and utilities. In general, the stocks in these industries have betas of less than 1.
The defensive super sector is made up of the following sectors:
Not Classified
Not all individual stocks or all securities in fund portfolios can be identified or classified by Morningstar. If a security cannot be identified or classified, it will be reflected in this number.
World Regions
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.
The Americas: This super region includes North America and Latin America. Within this super region, we have the following economic regions:
North America
Latin America
Greater Europe: This super region includes the United Kingdom, continental Europe (Western and Eastern Europe, Russia), and Africa. Within this super region, we have the following economic regions:
United Kingdom
Europe Developed
Europe Emerging
Africa/Middle East
Greater Asia: This super region includes the Middle East and all other Asian countries In addition to stand alone countries, or sub-regions such as Japan and Australasia (Australia and New Zealand). Within this super region, we have the following economic regions:
Japan
Australasia
Asia Developed
Asia Emerging
Not Classified: Not all individual stocks or all securities in fund portfolios can be identified or classified by Morningstar. If a security cannot be identified or classified, it will be reflected in this number.
Click here for more information on regional exposure.
Top 10 Holdings
The top 10 holdings in the portfolio, ranked by % of assets.
% of Assets: The percentage of assets the holding takes up in the portfolio.
Holding Name: The name of the portfolio holding.
Security Type: Securities are classified by types.
Fund Category/Stock Industry: This field indicates into which Morningstar Category each of your mutual funds is classified. and into which primary area of business your stock holdings fall.
Market Value $: The current value of a given holding, in dollars. It is calculated by multiplying price ($) times shares.