We can calculate the 3-, 5-, 10-year and Overall extended performance ratings based on the available extended performance returns for each share class. First, we calculate the Morningstar risk-adjusted return for the time period using real and extended performance monthly returns. Then, we compare the risk-adjusted return to established breakpoints for the category to assign the rating. Extended performance risk-adjusted return figures do not affect the original bell curve used to determine Morningstar Ratings for funds with actual performance. Therefore, funds� actual ratings will not change as a result of newer share classes receiving extended performance ratings.
To determine the Overall rating for open-end funds, extended performance ratings are used only when all of the 3-, 5-, and 10-year ratings available are derived through extended performance. Once an actual 3-year rating is available, the Overall rating is calculated as a weighted average of actual ratings only.
To determine the Overall rating for variable annuity subaccounts, actual and extended performance ratings are used together to create the weighted average for the Overall rating per the standard Morningstar Rating methodology.