Effective October 3, 2003, the foreign stock mutual funds will fall into foreign large value, foreign large blend, foreign large growth, foreign small/mid-cap value or foreign small/mid-cap growth depending upon various criteria, according to a news release.
Among the criteria:
- Foreign Large Value – funds that invest most of their assets in large, international stocks that are value-oriented
- Foreign Large Blend – funds that invest in a variety of large, international stocks where neither growth nor value characteristics predominate
- Foreign Large Growth – funds that invest most of their assets in large international stocks that are growth oriented
- Foreign Small/Mid-Cap Value: Funds that invest most of their assets in small- and mid-sized international stocks that are value-oriented
- Foreign Small/Mid-Cap Growth: Funds that invest most of their assets in small- and mid-sized international stocks that are growth-oriented.
The move, which does not affect world-stock, emerging- markets, and region-specific funds, was made to help investors when choosing funds and building portfolios, Morningstar managing director Don Phillips said in a statement. “By separating them into five distinct categories by similar investment style and size, we can more effectively help investors understand the differences between the funds.”
Morningstar’s reclassification will affect open-end mutual funds, closed-end funds, exchange-traded funds, variable annuities and separate accounts.