Morningstar is giving its fund categories a facelift. In the next six months, the Chicago investment research firm will roll out 11 new categories, change the name and/or definition of eight more and delete one altogether, Morningstar has just announced in a letter to its customers.

In line with the times, Morningstar is also creating new categories for two niches: "bank loan" and "bear-market" funds.

The domestic hybrid category, home mostly to balanced funds that invest in both stocks and bonds, will be deleted, and in its place, Morningstar will roll out "conservative allocation" and "moderate allocation" categories.

Another new category will be "high-yield muni" funds, defined as funds with at least half of their assets in municipal bonds that either are not rated or are below BBB.

If the firm is successful, the new categories will enable portfolio managers and financial planners to construct better portfolios and investors will have a better idea of what kind of performance to expect, said Morningstar Managing Director Don Phillips

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