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Fund Spy

How Morningstar's Fund Ratings Have Performed

The ratings have performed pretty well, but there are opportunities for improvement.

In this piece, we review the performance of Morningstar's different fund rating systems in the United States--the Morningstar Rating for funds, or the "star rating," the Morningstar Analyst Rating, and the Morningstar Quantitative Rating for funds. For further background on the fund ratings, see the appendix at the end of this article.

On balance, the three ratings systems have performed pretty well. The star rating appears to point investors toward funds that are more likely to survive and outperform, and away from those likelier to fail. The Analyst Rating and Quantitative Rating look to sort funds effectively based on future risk-adjusted returns, though that's less evident by some other measures.