Morningstar Provides Money Help With New Forward Looking Rating System

To provide money help to investors, Morningstar released a new forward looking rating system for mutual funds. This system is a complete departure from the current backward looking star rating system. The star ratings look at how a fund performed over the long haul on a risk-adjusted basis versus its peers and is largely based on quantitative measures whereas the new system has mostly qualitative elements. This new rating system will provide mutual funds with scores of gold, silver, bronze, neutral or negative. The analyst’s assessment of a mutual fund’s strengths and weaknesses is based on five key pillars. These pillars are people, process, parent, performance and price.