Investing September 25, 2003

Morningstar Divvies Up Foreign Stock Mutual Fund Category

September 25, 2003 (PLANSPONSOR.com) - Morningstar Inc's foreign stock mutual fund category is being split up into five new categories.
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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.

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