3 New Morningstar Medalists
Learn what brought about these Morningstar Analyst Ratings changes.
Susan Dziubinski: Hi, I'm Susan Dziubinski for Morningstar.com. Morningstar regularly re-evaluates the fund Analyst Ratings on the funds under analyst coverage. Here are three funds whose Analyst Ratings have been upgraded during the past few months. These funds are now among our Morningstar Medalists.
Miriam Sjoblom: We've recently upgraded PIMCO Dynamic Bond's Morningstar Analyst Rating to Bronze from Neutral. This fund used to be called PIMCO Unconstrained Bond, and it had a rough period from 2013 through 2015. It had four different lead managers during that period in quick succession. And when the current lead manager, Marc Seidner, came aboard, he had a pretty rough stretch in 2015 just right out of the gate. There are a few reasons driving the upgrade for the fund at this time. The first is that PIMCO, a little more than a year ago, cut fees on the fund. The fund is not exactly cheap, but it's no longer prohibitively expensive. So, that should help its chances going forward. Also, the team has stabilized quite a bit. Marc Seidner has now been the lead manager here for four years. And more importantly, Seidner has also made some key improvements to the process. This strategy has a wide latitude to invest in a lot of the bond markets' riskier sectors, which means mistakes can be costly. Seidner has been focused more on risk management and making sure that any individual bets or risk factors aren't driving the fund's returns. So, the fund has done pretty well with this more circumspect approach through a variety of markets in the last couple of years and that gives us confidence that what we saw from the fund in 2015 is going to be more of the exception than the rule. That, plus the wealth of resources at PIMCO, should help this fund be one of the better performers in the nontraditional bond category from here.
Susan Dziubinski does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.