Closed-end Funds: Data Definitions: Portfolio

 Equity Investment Style

Style Summary

The Equity Style Box is a nine-box matrix that displays the weighted portfolio stock and mutual fund investment methodology and the size of the companies in which they invest. Combining these two variables offers a broad view of a portfolio's equity holdings and risk. For a complete explanation of how we calculate the Equity Style Box for stocks and stock funds, see the Morningstar Style Box topic.

Trailing Valuations

Geometric Average Capitalization ($Mil)

Morningstar defines the overall "size" of a stock fund's portfolio as the geometric mean of the market capitalization for all of the stocks it owns. It's calculated by raising the market capitalization of each stock to a power equal to that stock's stake in the portfolio. The resulting numbers are multiplied together to produce the geometric mean of the market caps of the stocks in the portfolio, which is reported as geometric average cap.

This number is different from the fund's median market cap—the capitalization of the median stock in its portfolio. The geometric average cap better identifies the portfolio's "center of gravity." That is, it provides more accurate insight into how market trends (as defined by capitalization) might affect the portfolio.

 

 Fixed-Income Investment Style

Style Summary

Listed for both domestic and international fixed-income funds, with the exception of convertible-bond funds. The data focus on the two pillars of fixed-income performance: interest-rate sensitivity and credit quality. Morningstar splits fixed-income funds into three duration groups: limited (Ltd), moderate (Mod), and extensive (Ext), and three credit quality groups: high- (H), medium- (M), and low-quality (L).

These groupings display a portfolio’s effective duration and credit quality to provide an overall representation of the fund’s risk, given the length and quality of bonds in its portfolio. As with equity funds, nine possible combinations exist, ranging from short duration/high quality for the safest funds to long duration/low quality for the riskiest.

Bond Quality

The credit analysis depicts the quality of bonds in the fund's portfolio. The analysis reveals the percentage of fixed-income securities that fall within each credit-quality rating as assigned by Standard & Poor's or Moody's.

At the top of the ratings are AAA bonds. U.S. government bonds are also included within the AAA category (effective 6/30/06). Bonds with a B rating are the lowest bonds that are still considered to be of investment grade. Bonds that are rated lower than B (often called junk bonds or high-yield bonds) are considered to be quite speculative. Any bonds that appear in the NR/NA category are either not rated by Standard & Poor's or Moody's, or do not currently have a rating available.  

 

 Asset Allocation

% Cash

The percentage of the fund’s net assets held in cash. Cash encompasses both actual cash and cash equivalents (fixed-income securities with a maturity of one year or less) held by the portfolio plus receivables minus payables.

Note: Negative percentages of cash indicate that the portfolio is leveraged, meaning it has borrowed against its own assets to buy more securities or that it has used other techniques to gain more than 100% exposure to the market.

% Stocks

Incorporates only the portfolio’s straight common stock holdings.

% Bonds

Identifies the percentage of the fund’s net assets held in bonds. Bonds include everything from government notes to high-yield corporate bonds.

% Other:

Includes preferred stocks (equity securities that pay dividends at a specific rate) as well as convertible bonds and convertible preferreds, which are corporate securities that are exchangeable for a set amount of another form of security (usually common shares) at a prestated price. Other also may denote holdings in not-so-neatly-categorized securities, such as warrants and options.

Foreign:

The percentage of stocks made up of non-U.S. stocks.

% Leveraged

The degree to which a closed-end fund is utilizing borrowed money in order to have a bigger asset base with which to invest. This leveraging practice necessarily increases risk, yet also increases the potential for greater return.

This figure is collected quarterly from fund surveys.

Common Assets ($Mil)

The common net assets of the closed-end fund, recorded in millions of dollars. This is an annual figure collected from the fund's annual report.

Preferred Assets ($Mil)

The preferred net assets of the closed-end fund, recorded in millions of dollars. This is an annual figure collected from the fund's annual report.

 

 Sector Weightings (stock funds only)

Morningstar divides the economy into three super sectors and 11 sub-sectors. Read the global equity classification methodology.  

Cyclical

Sensitive

Defensive

 International Exposure ( international stock funds only)

Regional Exposure

Each region's exposure is presented as a percentage of non-cash equity assets held by the fund. Regional exposure information summarizes a portfolio's exposure to geopolitical risk.

For stock funds, regional exposure is calculated as a percentage of stocks; for bond funds, the data is available for international bond funds only, and is culled from quarterly surveys.

Morningstar’s regions are classified into the geographic regions. The regions are then folded into three super geographic regions of the Americas, Greater Europe and Greater Asia.

The Americas: This super region includes North America (the U.S. and Canada) and Emerging Central & Latin America. Within this super region, we have the following economic regions:

Greater Europe: This super region includes the United Kingdom, continental Europe (Western and Eastern Europe, Russia) and Africa. Within this super region, countries are classified as Euro and Non-Euro, as well as “Developed” and “Emerging”. Within this super region, we have the following economic regions:

Greater Asia: This super region includes Asian countries. In addition to stand alone countries, or sub-regions such as Japan and Australasia (Australia and New Zealand). Within this super region, we have the following economic regions:

Country Exposure

Displays the countries in which the fund invests most heavily. This information is gathered from fund companies and is the most recent data available.

 

Top 25 Holdings

Total Number of Stock Holdings

The total number of equity securities in a fund’s portfolio. This number can be quite useful for gaining greater insight into the portfolio’s diversification.

Total Number of Bond Holdings

The  total number of fixed-income securities in a fund’s portfolio. This number can be quite useful for gaining greater insight into the portfolio’s diversification.

% Assets in Top 10 Holdings

The aggregate assets, expressed as a percentage, of the fund's top 10 portfolio holdings. This figure is meant to be a measure of portfolio concentration and risk. Specifically, the higher the percentage, the more concentrated the fund is in a few companies or issues, and the more the fund is susceptible to the market fluctuations in these few holdings.

Turnover

A measure of the fund’s trading activity which is computed by taking the lesser of purchases or sales (excluding all securities with maturities of less than one year) and dividing by average monthly net assets. A turnover ratio of 100% or more does not necessarily suggest that all securities in the portfolio have been traded. In practical terms, the resulting percentage loosely represents the percentage of the portfolio’s holdings that have changed over the past year.

Yield:

Expressed as a percentage, this figure represents a fund’s income return on capital investment for the past 12 months. It refers only to interest distributions from fixed-income securities, dividends from stocks, and realized gains from currency transactions.

Monies generated from the sale of securities or from options and futures transactions are considered capital gains, not income. Return of capital is also not considered income NMF, or No Meaningful Figure, appears in this space for those funds that do not properly label their distributions. We list N/A if a fund is less than one year old, in which case we cannot calculate yield.

Morningstar computes yield by dividing the sum of the fund’s income distributions for the past 12 months by the previous month’s NAV (adjusted upward for any capital gains distributed over the same time period).

Top 25 Holdings

The top holdings in the fund’s portfolio are ranked by % Net Assets.

Note about portfolio dates  (explanation of reporting frequency)

Morningstar makes every effort to gather the most up-to-date portfolio information from a fund. By law, however, funds need only report this information two times during a calendar year and they have two months after the report date to actually release the shareholder report and portfolio. Therefore, it’s possible that a fund’s portfolio could be up to eight months old at the time of publication. We print the date the portfolio was reported.

Older portfolios should not be disregarded, however. Although the data may not represent the exact current holdings of the fund, it may still provide a good picture of the overall nature of the fund's management style.