Morningstar Inc. has updated its quarterly ranking of large target date fund groups, raising its rating on TIAA-CREF and MassMutual Retirement Services, while lowering its rating on Fidelity Investments
Morningstar Inc. has updated its quarterly ranking of large target date fund groups, raising its rating on TIAA-CREF and MassMutual Retirement Services, while lowering its rating on Fidelity Investments.
Morningstar's ranking features five categories — top, above average, average, below average and bottom — based on five measurements, spokeswoman Alexa Auerbach said.
The five categories are people, parent, performance, portfolio and price. The first two measurements reflect qualitative assessments of fund management, and the other three reflect analyses of investments made and fees charged, Ms. Auerbach said.
Among the 21 target date fund groups in Morningstar's ranking, The Vanguard Group Inc., T. Rowe Price Associates Inc. and American Funds placed in the top category, while target date funds from AllianceBernstein LP and OppenheimerFunds Inc. were in the bottom category.
TIAA-CREF moved to an “above-average” rating from “average” because of “a greater share of assets in its cheapest share class as well as improved target date transparency,” according to e-mailed comments from Laura Lutton, editorial director at Morningstar. MassMutual rose to “average” from “below average,” based on “the gradual improvement in its portfolio quality and performance,” she said.
Fidelity slipped to “average” from “above average.”
“We lowered the rating in the parent company category because recent hiring and organization changes have not resulted in better performance, and we continue to see high manager turnover,” Ms. Lutton wrote.
Robert Steyer is a reporter at sister publication Pensions & Investments.
