The Morningstar calculations of the total return are based on the relation between net asset value per share in the end and at the beginning of the month together with the correlation of per-share distribution and reinvestment at a specific time. Net asset value per share is divided by the number of distributions. The tax-adjusted dividend per share conforms to the correlation between actual dividend per share and the product of maximum state tax rate and maximum federal tax rate. Finally, cumulative value calculations depend on total return for over a period of T months in case there are no redemption fees. In case, there the redemption fees are present, the cumulative value will be adjusted to such variables as front and deferred load and redemption fees. Morningstar Rating usually resorts to different fund categories of asset classes which serve as the basis for further calculations. To provide accurate calculation and reporting, Morningstar publishes the categories in comparison to one another. The Morningstar Rating provides advice for investors on how to select one of the funds out of a number of available ones. In Morningstar rating, an accent has been made regarding the funds as investment portfolios rather than autonomous investments. Therefore, Morningstar provides the funds in comparison based on risk-adjusted-performance.
Unlike the methodology applied by Morningstar Ratings, Standard and Poor’s method of mutual fund ranking moves away from the risk-adjusted theories instead of being more focused on the consideration of risk and cost factors. Hence, the risk consideration includes interest-rate risks and a combination of inputs-based fund’s holdings and records of accomplishment. The cost aspect is split into such areas as Turnover, Expense ratio, and Sales Load. The categories are embedded in such areas as domestic and international equity, global equity, taxable fixed income, and tax-excluded fixed income and blended types of mutual funds. Each category is further split into sub-categories depending on the fiscal year. Standard and Poor’s ratings are accomplished for the advisers that can compare and contrast by means of seven mutual funds categories. This also helps advisers to find their own approach for mutual fund assessment. Hence, the philosophy of this survey is more focused on the personal evaluation of the published information.
In its measurements and calculations, the Value Line survey also provides a high-quality analysis of information and converts it into the format, which will be available for readers. To measure mutual fund performance, Value Line conducts research on certain companies for acquiring the data about inside and outside profiles of the organizational structure related to mutual fund investment. To provide the investors with accurate and easy-formatted data, Value Line’s examination of mutual funds is reduced to the consideration of ratings and reports section and performance and index section. In the first section, the survey submits a profile of main equity mutual funds and covers some additional ratios of additional equity and bond funds. In the second sector, the readers are presented with different recommendations, commentaries on significant investment tendencies, and factors that influence mutual funds and their overall statistics. The Value Line ratings are published for the investors to reach the highest returns from their investments from ordinary shares. This publication also assists the readers in making favorable investment decisions. The investors are also regularly informed with valuable information, which is submitted in the available format.