About the Morningstar Categories

Morningstar’s categories are intended to distinguish funds by what they own as well as by their investment objectives and styles.

Whereas traditional fund definitions often simply identified a fund’s investment goals based on the wording in the fund prospectus, Morningstar looks at the stocks a fund has actually held to decide which category it should fall under. If a fund is new and there are no data on its holdings, the choice is based on the best information available.

Morningstar will change a category assignment based on new information. Some funds report their holdings often, many of them monthly, but some report far less often. There is a legal requirement to report them every six months.

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Morningstar’s categories, with top-ranked funds in each, are listed on the following pages.

A few categories have been omitted, generally tax-free income funds designed for residents of states other than California.

Unlike other lists here, the list of California municipal bond (tax-free) mutual funds on D15 represents the majority of all such funds.

Most of the categories are narrow bond categories and specialty stock categories.

However, most mutual funds fall into one of the nine domestic equity categories, which are listed first.

These are based on a combination of the average market value of the companies in the fund (small, medium or large) and the style, based on whether the companies are relatively highly valued by the market (“growth”), less valued (“value”) or a combination of the two (“blend”).