Browsing by Author "Löf, Matthijs"

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    The Misclassification of Bond Mutual Funds - Evidence from Europe
    (2023) Tavassoli, Arman; Löf, Matthijs; Rahoituksen laitos; Kauppakorkeakoulu; School of Business
    I analyze open-end fixed-income funds to investigate the accuracy of Morningstar’s fixed-income mutual fund classifications in European markets. I present findings indicating that the significant revision of Morningstar's risk style assignment methodology in 2022 has significantly reduced the misclassification of funds, nearly eliminating it. I also find that within supposed category groups, misclassified funds used to outperform. However, when classified based on their actual risk these funds were mediocre performers. I show that Misclassification also impacts Morningstar Star ratings and Management fees.