The expense ratio is the annual fee that all funds or ETFs charge their shareholders. It expresses the percentage of assets deducted each fiscal year for fund expenses, including 12b-1 fees, management fees, administrative fees, operating costs, and all other asset-based costs incurred by the fund.

A fund's Expense Ratio receives a passing score if its expense ratio is in the lowest quintile of that fund's category.

This is a proprietary Morningstar data point. An assessment of the variations in a fund's monthly returns, with an emphasis on downside variations, in comparison to similar funds.

Any risk level lower than High receives a passing grade.

The performance measure compares a fund's performance to that of its benchmark over the period of the longest serving manager's tenure.

A fund's Performance Measure receives a passing score if that fund's return is greater than its benchmark return over the tenure of the longest serving manager. If the tenure of longest termed manager is less than 5 years, the fund receives a failing grade.

This is my subjective rating of the management of the fund. Does the fund have superior managers and analysts or are they undistinguished? I rated the managers of the M500 funds.

A Manager Rating receives a passing score if the management receives a score of A, B or C.

The amount of money a fund manager(s) invests in his or her fund.

A Manager Rating receives a passing score if the manager has 500k or more invested in his/her fund.

Morningstar's Stewardship Grade for funds goes beyond the usual analysis of strategy, risk, and return. The Stewardship Grade allows investors and advisors to assess funds based on factors that we believe influence the following: The manner in which funds are run. The degree to which the management company's and fund board's interests are aligned with fund shareholders. The degree to which shareholders can expect their interests to be protected from potentially conflicting interests of the management company. We assign each fund a letter grade from A (best) to F (worst). Funds are graded on an absolute basis. There is no "curve." Morningstar analysts' evaluation of five factors determine the grade for each fund: Regulatory Issues, Board Quality, Manager Incentives, Fees, and Corporate Culture. Morningstar's Stewardship Grade for funds is entirely different from the Morningstar Rating for funds, commonly known as the Star Rating. There is no relationship between the two.

A fund's Stewardship Grade receives a passing score if it graded A, B or C.