Please stay tuned for important disclosure information at the conclusion of this episode.

Welcome to Investing Insights. I'm your host, Ivana Hampton. Morningstar stamps what it thinks about a fund's future with this medalist rating. You've probably seen a star with the word gold, silver, or bronze next to a fund you were

researching on morningstar.com.

This represents the fund's morning star medalist rating.

The manager research team recently reworked and simplified how they judge funds to create a simpler

process for investors to understand.

The new methodology also brings more transparency and stability.

Some funds ratings rolls while others fail or held steady.

What were the key factors that led to the upgrades and downgrades?

And which funds gained or lost status?

Morningstar Senior Principal of Ratings, Russ K Kuhnall was in the room where it happened.

Russ, who is also the editor of Morningstar Fund Investor, is here to talk about it.

Thanks for joining me, Russ.

Great to be here.

Your team recently underwent a big undertaking.

What motivated you all to refresh the criteria for the Morningstar medalist ratings?

Well, you know, we wanted to make it simpler and a little easier to understand for people,

and we felt like there were some changes we could make under the scenes that would just make it a little better overall.

Now, the previous system graded on a curve while trying to estimate a fund's outperformance relative to its category.

What are you all considering now and why is it better?

Yeah, so we're getting rid of that estimate of categories alpha, which looked at total returns

and the variability of returns to kind of back into alpha. And it would also, as a result,

...