The Morningstar Style Box - Fixed-Income

Morningstar Style Box


The Fixed-Income Style Box

The model for the fixed income style box is based on the two pillars of fixed-income performance: interest-rate sensitivity and credit quality. As depicted in the image below, the three interest sensitivity groups are limited, moderate and extensive and the three credit quality groups are high, medium and low. These groupings display a portfolio's effective duration and third party credit ratings to provide an overall representation of the fund's risk orientation given the sensitivity to interest rate and credit rating of bonds in the portfolio.

Comment: Readers may be familiar with this but it is relatively new to me. So in the case of PTTAX, the credit quality is high, the interest rate sensitivity is medium.

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