Morningstar updated analyst ratings for 926 equity categories of funds, exchange-traded funds and separately managed accounts / collective investment funds as of February 2021. Of these, 563 maintained their previous rating, 63 have demoted, 195 were upgraded, 94 were new, and 11 were reviewed for significant changes, such as manager departures.

Sifting through several categories of stocks and vehicles, Morningstar rated 246 unique strategies in February 2021. Of these, 37 received a rating for the first time, with the remainder having at least one type of investment vehicle that ‘a Morningstar analyst previously covered. Below are some highlights of the upgrades, downgrades, and what’s new in coverage.

Upgrades

Variable rate of the T. Rowe price (RPIFX) A strong team secured an upgrade of the People Pillar rating to High vs. Above Average, which raised its Morningstar Analyst Rating to Gold for its cheapest share classes. Its most expensive share class won a Silver. Paul Massaro has been the portfolio manager of this fund since its creation in 2008. He is supported by associate manager Stephen Finamore and a credit research team of 17 analysts dedicated to leverage financing. Massaro and the team research the relative value of bank loans, focusing primarily on BB and B rated loans while being more selective in CCC loans. The team’s rigorous stock selection process has provided strong downside protection since inception, and the fund has ranked in the top decile of its peers in the Morningstar bank lending category over the past year. this period.

The retirement of T. Rowe Price (TRPMX) the target date series carefully fine-tuned its stock slide trajectory and achieved an above-average process rating improvement to High. This earned its two cheapest share classes the analysts’ rating upgrades to Gold and its more expensive, Bronze. In a well-planned transition, Wyatt Lee took over from longtime manager Jerome Clark in early 2021. Lee has been this series manager for five years, and two comanagers back him. The team spent more than two years researching updates to their stock evolution plan and began implementing the changes in April 2020. They maintain that savers’ greatest risk is to outlive their savings. assets and that the best remedy is a larger equity allocation. It has boosted exposure to equities at almost every point on the descent path, making it one of the richest in equities. The series holds some of T. Rowe Price’s best funds, with 78% of the series’ assets in Morningstar Medalist funds. This team also manages the MassMutual Select TRP retreat. (MMDDX) Series to target date similarly, earning it an above-average process rating upgrade to High this month as well. This has raised its rating to gold for its cheapest share classes, while the others go from silver to neutral.

New in the cover

Ultra-short Baird Bond (BUBIX) debuted with a gold analyst rating for its cheapest share classes while its most expensive got silver. Baird Senior Manager and CIO Mary Ellen Stanek leads a well-established portfolio management team of eight people and draws on a roster of five structured analysts, seven credit and four risk analysts. The team follows the same controlled and thoughtful process that it has used for its other taxable fixed income funds for two decades. It uses the Bloomberg Barclays Short-Term US Government / Corporate Index as a benchmark for security and sector positioning. The managers keep the strategy neutral in terms of duration and take advantage of fundamental research to generate a yield advantage. Thanks to low fees, the strategy has beaten the benchmark and 65% of its distinct competitors since its inception in 2014.

Downgrades

BlackRock Total Factor (BSTIX) People’s rating has fallen to Medium Above Average, bringing its analyst rating to Bronze Neutral for all share classes. He Ren replaced Ked Hogan as manager here in December 2020, as Hogan took a larger role in factor research. While Phil Hodges has been the manager of this fund since its inception, Ren has only been in the industry for six years. The 12-person team of analysts supporting the managers also lost five analysts in 2020. The managers take a unique approach to portfolio construction with around 70% of its risk allocation invested in a market neutral and focused round. factors and the rest allocated in a basket of long-only and diversified assets. In the market neutral round, managers seek to isolate high value, momentum, interest rate carry and low beta factors and sell those with opposite profiles. The long sleeve only provides exposure to general economic themes and generally moves in the same direction as the market.

Due to an increasingly competitive fee landscape among passive funds, iShares Russell Mid-Cap Value ETF (IWS) fell to a Bronze rating from Silver. This fund tracks the Russell Midcap Value Index, which targets the cheapest half of the US mid-cap equity market. The stocks in this index often have poor growth prospects and their low valuations are often justified. However, companies that can exceed their modest expectations should reward investors. Five managers appointed to this fund lead the BlackRock index portfolio team and oversee day-to-day operations. The fund effectively diversifies valuation risk by weighting a large portfolio of 702 securities based on market capitalization. Additionally, although this fund looks at value-friendly sectors such as industrials, utilities and energy, it is diversified across all sectors, with the largest holding at 17% of assets.