Morningstar Sustainability Rating

  

Categories: Stocks, Metrics

See: Morningstar Inc.

The Morningstar sustainability rating tells us how well certain mutual funds are handling their ESG challenges (that’s environmental, social, and governance), and like the remix to “Ignition,” this rating system is fresh out the kitchen—it’s only existed since August of 2016. It tries to help investors find “sustainable” investment opportunities, i.e., mutual funds or ETFs that align with their environmental, social, and governance-related values.

Want to invest in companies that actively promote women and minorities? Interested in funds that support environmental initiatives? Then the Morningstar sustainability rating system might just help us find what we’re looking for.

Picture a five-star rating system, but instead of stars, let’s be original and use globes. Three globes equals average, so if a mutual fund receives a three-globe rating, that means it’s performing right in line with the rest of the mutual fund pack. As we might expect, a five-globe rating means a fund is awesome, while a one-globe rating means it’s...the opposite of awesome.

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