At various places, Morningstar shows how an individual fund compares to the average of all funds within its Morningstar Category, objective or benchmark index. The Category, objective, or index is always set equal to 1.00. For example, a Large Blend fund with a utility weighting of 1.50 has 50% more in utility issues than its average peer.
Relative Index Example
As of 3/31/98, Putnam New Opportunities A has an average P/E of 40.1. 1.35 appears in the Relative Index column on the Fund Detail. This means that the P/E of Putnam New Opportunities A is 35% larger than the average P/E of the S&P 500 (We compare equity funds to the S&P 500 and bond funds to the Barclays Aggregate.)
Relative Category Example
Putnam New Opportunities A has a Morningstar Category of Mid-Cap Growth, and as of 3/31/98, the fund has an average P/E of 40.1. 1.13 appears in the Relative Category column on the Fund Detail. This means that the P/E of Putnam New Opportunities A is 13% larger than the average P/E for Mid-Cap Growth funds.