Personal Finance

The Best Opportunities for Fund Investors Today

Morningstar, Inc.
Morningstar, Inc.•May 29, 2026

Why It Matters

The revised ratings can materially alter investor perceptions and fund flows by elevating diversified, lower-volatility products and penalizing high-fee share classes, so advisors and retail investors should re-check Morningstar ratings and fee structures when evaluating funds.

Summary

Morningstar overhauled its Medalist fund-rating methodology to simplify, increase transparency and stabilize ratings by removing a volatility-based ‘category alpha’ adjustment and reweighting factors like process and fees. The change generally benefitted less-volatile strategies—bond, allocation and target-date funds saw the biggest upgrades—while some small-cap and higher-fee share classes lost ground. Selected fund shifts included Fidelity Contrafund dropping to bronze amid manager transition, Pimco Income holding silver due to higher retail fees, and Vanguard Total Stock Market’s retail share rising to gold after fee parity with institutional classes. T. Rowe Price allocation and floating-rate funds also gained as the new approach rewards diversified, lower-volatility offerings.

Original Description

#MutualFunds #MorningstarMedalists #FundRatings
Plus, how Morningstar’s new methodology treated Vanguard and Fidelity.
Morningstar stamps what it thinks about a fund’s future with this Medalist Rating. You’ve probably seen a star with the word Gold, Silver, or Bronze next to a fund you were researching on Morningstar.com. This represents the fund’s Morningstar Medalist Rating. The manager research team recently reworked and simplified how they judge funds to create a simpler process for investors to understand. The new methodology also brings more transparency and stability. Some funds’ ratings rose, while others fell or held steady. What were the key factors that led to the upgrades and downgrades, and which funds gained or lost status?
Morningstar Senior Principal of Ratings Russ Kinnel was in a room where it happened. Russ, who is also the editor of Morningstar FundInvestor, is here to talk about it.
How Morningstar’s New Medalist Rating Methodology Affects 11 of America’s Largest Funds
On this episode:
00:00:00 Welcome
00:01:06 Why Morningstar refreshed its Medalist Rating methodology
00:02:16 How the new criteria evaluate active and passive funds
00:02:40 Rating changes across fund categories and equity style boxes
00:03:43 Fidelity Contrafund, Pimco Income, and Vanguard Total Stock Market Index reviewed
00:05:31 Upgrades for target date, bank loan, and allocation funds
00:07:50 High fees trigger downgrades for some funds
Watch more from Morningstar:
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This episode is sponsored by Vanguard: https://advisors.vanguard.com/engagement/fixed-income

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