Morningstar Category
The Morningstar Category identifies separate accounts based on their actual investment styles as measured by their underlying representative holdings (portfolio statistics and compositions).
Annual Returns
Total returns calculated on a calendar-year basis. The annual return for a separate account will be the same as its trailing 12-month total return only at year-end.
Number of Accounts
Number of total accounts run by the asset manager in this product.
High Dispersion
Rate of return for the highest performing separate account in this product.
Median Dispersion
Rate of return for the median separate account in this product.
Low Dispersion
Rate of return for the lowest performing separate account in this product.
Standard Deviation of Accounts
A statistical measurement of dispersion about an average, which, for a separate account, depicts how widely the returns varied over a certain period of time. Investors use the standard deviation of historical performance to try to predict the range of returns that are most likely for a given separate account. When a separate account has a high standard deviation, the predicted range of performance is wide, implying greater volatility.
Standard deviation is most appropriate for measuring risk if it is for a separate account that is an investor’s only holding. The figure can not be combined for more than one separate account because the standard deviation for a portfolio of multiple separate accounts is a function of not only the individual standard deviations, but also of the degree of correlation among the separate accounts' returns.
If a separate account’s returns follow a normal distribution, then approximately 68 percent of the time they will fall within one standard deviation of the mean return for the fund, and 95 percent of the time within two standard deviations. For example, for a separate account with a mean annual return of 10 percent and a standard deviation of 2 percent, you would expect the return to be between 8 and 12 percent about 68 percent of the time, and between 6 and 14 percent about 95 percent of the time.
Morningstar computes standard deviation using the trailing monthly total returns for the appropriate time period. All of the monthly standard deviations are then annualized. Standard deviation is also a component in the Sharpe Ratio, which assesses risk-adjusted performance.