Morningstar announced today that it has awarded the Gold to two mutual funds, one a former Silver-rated fund and the other a brand new Medalist.

Fidelity Small Cap Discovery was upgraded from a Silver to a Gold rating. Meanwhile, Litman Gregory Masters International emerged from Under Review status to nab the gold.

Morningstar upgraded the fund following its decision to close to new investors after Jan. 31. Small Cap Discovery has enjoyed overwhelming flows since manager Chuck Myers took over in 2006 through Jan. 15. It took in nearly $1.3 billion in 2012 alone, an amount that exceeded the fund's overall size just two years prior.

"This move should help maintain the fund's flexibility, especially because Myers prefers to hold 70 stocks or fewer. Further asset growth likely would have jeopardized his successful approach, forcing him to hold more stocks and making it difficult to establish meaningful positions in his favorite names," Morningstar analyst Katie Rushkewicz Reichart wrote about the fund.

Litman Gregory Masters International has added two more subadvisers to its existing five: Lazard Asset Management and Wellington Management Company. Morningstar analyst William Samuel Rocco wrote that he is "optimistic" about the modified subadviser lineup, pointing out that Lazard and Wellington are "good shops", and portfolio managers Mark Little of Lazard and Jean-Marc Berteaux of Wellington are veterans at their firms.

Morningstar previously placed the fund under review pending full evaluation of Little and Berteaux's strategies and abilities, and to assess their potential impact to the fund.

Two other mutual funds won Silver ratings and two Bronze ratings for the first time. Also, 20 funds were reaffirmed as Morningstar Medalists, including Small Cap Discovery.

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