Morningstar Return™

Morningstar Return measures how much a fund’s total returns exceed those of a risk-free investment, also called the risk-free rate.

Morningstar adjusts for the risk-free rate because investors always have the option to invest with minimal or no risk. Morningstar Return helps investors understand fund performance relative to that risk-free investment. The risk-free rate used in the Morningstar Return calculation depends on the currency of the fund. For U.S. funds, the U.S. 3-Month Treasury Bill represents the risk-free rate.

Morningstar Return is adjusted further to account for the typical investor’s risk tolerance, to create the Morningstar Risk-Adjusted Return. The Morningstar Rating for a fund is based on its Morningstar Risk-Adjusted Return rank relative to other funds in the same Morningstar Category.