New global fund rating system from Morningstar/OBSR

Morningstar is set to launch a new colour-coded global analyst rating system for funds and a worldwide uniform approach for global fund research reports.

The launch introduces a rating scale that can be readily understood by investors worldwide, says joint managing-director, Richard Romer-Lee.

This has involved the adoption of a new naming convention for Morningstar’s global Analyst Rating scale - chiefly, explains Romer-Lee, so as to avoid creating unnecessary confusion with ratings issued by the credit rating industry.

The intention is that Morningstar will adopt the new ratings scale as from the  fourth quarter of this year when icons move from alphabetical to colour ratings and OBSR will make the transition to the new scale in the first half of 2012.

Essentially, fund rating users will find that the current OBSR scale of a Triple A will be termed Gold; Double A rating, Silver, and Single A rating will be termed Bronze. Two further category ratings will be Neutral and Negative.

Seeking to reassure clients, Romer-Lee, says, “We will continue to base our fund ratings and reports on our analyst team’s conviction about a fund’s ability to outperform its peer group and/or relevant benchmark on a risk-adjusted basis over the long-term. 

www.obsr.co.uk