Morningstar provides pre-inception returns for some mutual funds, separate accounts, insurance group separate accounts, and collective investment trusts in its universe. This means that any share class that doesn't have a 3-, 5-, or 10-year performance history may receive a hypothetical Morningstar Rating (what we call an Extended Performance Rating) based on the oldest surviving share class.
First, Morningstar computes the securities' new return stream by appending an adjusted return history of the oldest share class. Next, the Extended Performance Rating is determined by comparing the adjusted-historical returns to the current investment universe to identify placement in the bell curve used to assign the Morningstar Rating.
Note: While the inclusion of pre-inception data provides valuable insight into the probable long-term behavior of newer share classes, investors should be aware that an adjusted historical return can only provide an approximation of that behavior. For example, the fee structures between a retail share class will vary from that of an institutional share class, as retail shares tend to have higher operating expenses and sales charges. These adjusted historical returns are not actual returns.
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