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Morningstar Rating System

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The Morningstar rating system evaluates mutual funds according to a statistical method of risk and returns. One to five stars are given to a fund in the Morningstar rating system: one being the worst; five, the best. The Morningstar rating system focuses on a fund's past performance, not its potential. A fund in the Morningstar rating system is given a composite rating based on its track record during a period of three, five and ten years (if applicable). Therefore, a fund must have three or more years of performance history to be included in the Morningstar rating system. Funds in the Morningstar rating system are placed into one of four main groups: domestic-stock, international-stock, taxable bond, and municipal bond. In addition, funds in the Morningstar rating system are assigned to a specific category in each group, such as large growth, diversified pacific, long-term government, and high-yield municipal. To ensure fairness, a fund in the Morningstar rating system is compared only to funds in its category. The Morningstar rating system is a product of Morningstar Inc., a firm based in Chicago.



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