This is the fund’s total-return percentile rank relative to all funds that have the same prospectus objective in Morningstar’s universe of funds. The highest (or most favorable) percentile rank is 1 and the lowest (or least favorable) percentile rank is 100. The top-performing fund in a category will always receive a rank of 1.
Benefits
Percentile ranks within objectives are most useful in those groups that have a large number of funds. For small universes, funds will be ranked at the highest percentage possible. For instance, if there are only two specialty-utility funds with 10-year average total returns, Morningstar will assign a percentile rank of 1 to the top-performing fund, and the second fund will earn a percentile rank of 51 (indicating the fund underperformed 50% of the sample).
Origin
We calculate this figure using our total-return databases.
For the Pros
The percentile rank within objective figures allow for a direct comparison of a fund’s performance within its investment objective. To assess the relative performance of funds from different investment backgrounds, total return numbers offer a method of direct comparison.