Earlier this year Morningstar
introduced some changes to the methodology behind one of the components of its new analyst ratings for mutual funds. In the "Fund Spy" column, Morningstar fund research editorial director Laura Pavlenko
somes changes to the stewardship grade
methodology for the parent pillar of the analyst rating. Fundsters looking for a peek inside part of Morningstar's newest black box may want to read the full article
For example, Morningstar will now issue new stewardship grades to funds' parent companies instead of assigning
them to individual funds. The rating specialists will also up the importance of two stewardship grade components, corporate-culture
and manager-incentives, which proved predictive in a March 2011 study. And they will switch several criteria from fund-level to firmwide.
Correction: A prior version of this story listed the wrong timing for the changes to Morningstar's methodology for stewardship grades. Morningstar announced the changes in June, in advance of the new analyst ratings launched last month.
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