Rating Definitions

Market Risk Ratings

Moody’s Mutual Fund Market Risk (MR) ratings are opinions of the relative degree of volatility and loss severity of a rated fund’s net asset value (NAV), with an emphasis on downside risk. In forming an opinion on the fund’s future price volatility, Moody’s analysts consider risk elements that may have an effect on a fund’s net asset value, such as interest rate risk, prepayment and extension risk, liquidity and concentration risks, currency risk, and derivatives risk.

MR ratings are a companion to credit quality ratings, which provide investors with an easy to use measure of credit quality in respect of money market and bond funds. In addition, MR ratings are not intended to reflect the prospective performance of a fund with respect to price appreciation or yield.

Moody’s credit quality and market risk ratings together provide investors with a comprehensive and easy to use risk measurement framework in the fixed-income arena.

MR1

Money Market Funds and Bond Funds rated MR1 are judged to have very low sensitivity to changing interest rates and other market conditions.

MR2

Money Market Funds and Bond Funds rated MR2 are judged to have low sensitivity to changing interest rates and other market conditions.

MR3

Money Market Funds and Bond Funds rated MR3 are judged to have moderate sensitivity to changing interest rates and other market conditions.

MR4

Money Market Funds and Bond Funds rated MR4 are judged to have high sensitivity to changing interest rates and other market conditions.

MR5

Money Market Funds and Bond Funds rated MR5 are judged to have very high sensitivity to changing interest rates and other market conditions.

Note: A "+" modifier appended to the MR1 rating category denotes constant NAV money market funds and other qualifying funds.