Performance
Growth of $10,000 Graph
A chart showing the growth of a $10,000 investment in terms of both NAVs and market prices. The green line represents the growth of a $10,000 investment based on NAV performance and the red line represents the growth of the same investment based on market-price performance. The orange line represents the fund's Morningstar Category (see definition below). The starting date for each line is set to the earliest month from which Morningstar has continuous monthly return data, or to the leftmost point on the chart.
All three 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 $100,000 and $200,000 because both represent a 100% increase in investment value. This provides a more accurate representation of a fund's performance than would a simple arithmetic graph. All the graphs are scaled so that the full length of vertical axis represents a tenfold increase in investment value. For funds whose returns have exhibited greater than a tenfold increase over the period shown in the graph, the vertical axis has been compressed accordingly.
Annual Returns
All references to total return represent a fund's gains over a specified period of time. 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). The total returns account for management, administrative, and other costs automatically deducted from fund assets. Morningstar's return figures may differ from those published by other rating firms or fund groups. This may be a result of time-period discrepancies, or because different firms employ different methods for calculating total return. For example, some services reinvest all dividends at month-end prices. Morningstar, however, uses the actual reinvestment price that a shareholder would have to pay. Morningstar uses NAV, rather than market-price total returns, to produce the Risk-Adjusted Rating. NAV total return represents the performance of the underlying portfolio, net of expenses. Because the star rating is intended to incorporate fund-specific risk, not market risk, it makes sense to use NAV-based returns.
Market Return
Morningstar calculates the market-price return by taking the change in the fund's market price, reinvesting all income and capital-gains distributions during the period, and dividing by the starting market price.
NAV Return
Morningstar calculates NAV 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.
+/- Category: The amount by which a fund over- or underperformed its category during a given calendar year.
+/- Index: The amount by which a fund over- or underperformed its primary index during a given calendar year.
Nuts & Bolts
Fund Inception
Actual Expense Ratio
The annual expense ratio, taken from the fund's annual report, expresses the percentage of assets deducted each fiscal year for fund expenses, including management fees, administrative fees, operating costs, and all other asset-based costs incurred by the fund. Portfolio transaction fees or brokerage costs are not included in the expense ratio.
The expense ratio, which is deducted from the fund's average net assets, is accrued on a daily basis. If the fund's assets are small, its expense ratio can be quite high because the fund must meet its expenses from a restricted asset base. Conversely, as the net assets of the fund grow, the expense percentage should ideally diminish as expenses are spread across the wider base. Funds may also opt to waive all or a portion of the expenses that make up their overall expense ratio.
Estimated Expense Ratio (from prospectus)
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.
Manager Start Date
The date the current manager began managing the fund.
Quick Stats
Market Price
The price at which a closed-end fund may be bought or sold. The market price of a closed-end fund share generally differs from the NAV; this price difference—resulting in a premium or discount—is one of the main distinctions between closed-end funds and open-end mutual funds.
Day Change
The change in the market price of the fund from the prior business day.
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.
Premium/Discount
The amount by which a fund's market price is greater or less than the NAV, expressed as a percentage of the NAV. A negative number indicates that the fund's shares sold at a discount to NAV, and a positive number indicates that shares sold at a premium. For example, if the number shown is -10.0, the shares sold at a 10% discount to NAV.
Morningstar Rating
The Morningstar Rating brings both performance and risk together into one evaluation. To determine a fund's star rating for a given period (three, five, or 10 years), the fund's Morningstar Risk score is subtracted from its Morningstar Return score. The resulting number is plotted along a bell curve to determine the fund's rating for each time period: If the fund scores in the top 10% of its broad asset class (domestic stock, international stock, taxable bond, or municipal bond), it receives 5 stars (Highest); if it falls in the next 22.5%, it receives 4 stars (Above Average); a place in the middle 35% earns it 3 stars (Neutral or Average); those in the next 22.5% receive 2 stars (Below Average); and the bottom 10% get 1 star (Lowest). The star ratings are recalculated monthly.
Star ratings for closed-end funds are based on NAV rather than market-price total returns, not because market-price returns aren't important, but because they don't always reflect the returns fund managers deliver. Net asset value represents the performance of the underlying portfolio, net of expenses. Because the star rating is intended to incorporate fund-specific risk, not market risk, it makes sense to use NAV-based returns. In fact, the shorter the time frame, the more likely it is that a fund's NAV and market-price returns will diverge because of premiums and discounts. Funds that experience increased demand for their shares will have higher market-price returns if share prices rise faster than NAVs. Similarly, the market-price return of shares bought at a premium will be lower than the NAV returns if demand for the shares slows despite consistent NAV performance. Over time, the effects of premiums and discounts on returns tend to smooth out, and market-price and NAV returns converge to within a few points of each other. Thus, it's the performance of the underlying portfolio that really counts over time.
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 are designed to 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. The following is a list and explanation of the Morningstar Categories. 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.
Net Assets
This figure is recorded in millions of dollars and represents the fund's total asset base, net of fees and expenses.
Trading Information
Average Daily Volume (shares)
The average daily trading volume of common shares during the trailing 12 months.
Exchanges
Indicates the exchange on which the fund is traded. The most common exchanges for ETFs are the New York Stock Exchange (NYSE), and the American Stock Exchange (AMEX). Other exchanges that may be listed include NASDAQ, the Chicago Stock Exchange (CHX), the Toronto Stock Exchange (TSE), the Pacific Stock Exchange (PSE), the Osaka Stock Exchange (OSE), and over-the-counter (OTC) market.
Portfolio
Top 5 Holdings
These are the top 5 holdings in the fund's portfolio ranked by the % of net assets.
% 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.
Current Investment Style (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).
Asset Allocation
% Cash: 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.
Note: 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.
Top 3 Stock Sectors % (stock funds only)
The top sectors in which the fund has placed its stock assets. Morningstar divides the economy into three super sectors and 11 sub-sectors. Read the global equity classification methodology.
Cyclical
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.
Sensitive
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 companies 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.
Defensive
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.
Top 3 Credit Weightings (bond funds only)
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.