The ratings are aimed at advisers who wish to remain independent post-RDR and will have to consider all investment products when making recommendations.
The methodology for the ratings considers five key factors; people, process, parent, performance and fees.
It also considers the fund’s use of gearing and the discount at which the fund has been traded historically.
The five ratings are:
- Gold: Best-of-breed closed-end fund that distinguishes itself across the five pillars and has garnered the analysts’ highest level of conviction.
- Silver: Closed-end fund with notable advantages across several, but not all, of the five pillars- strengths that give the analysts a high level of conviction.
- Bronze: Closed-end fund with advantages that outweigh any disadvantages across the five pillars and sufficient level of analyst conviction to warrant a positive rating.
- Neutral: Closed-end fund that isn’t likely to deliver standout returns but also isn’t likely to significantly underperform.
- Negative: Closed-end fund that has at least one flaw likely to significantly hamper future performance and is considered an inferior offering to its peers.
There are currently investment trusts already rated as Gold by Morningstar.
These are the BlackRock Smaller Companies Trust, Blackrock World Mining Trust, City of London Investment Trust Plc, Murray International B ORD, Murray International Investment Trust, Perpetual Income and Growth, Perpetual Income and Growth 2013 Subs and Scottish Mortgage Investment Trust.
There are no funds rated as negative.
To view the ratings click here