News | 07.01.19
Morningstar Overhauls Influential Ratings System
Morningstar is revising a ratings system that investors use to help determine which funds to buy, asking analysts to focus more on the costs to investors when rating all types of investment funds. The system being changed was rolled out in 2011 as part of an effort to provide more predictive ratings. Morningstar will be putting more weight on costs when analyzing funds, looking more closely at whether the prices of funds are squeezing too much in returns for investors. It is also making it harder for active stock pickers to get top ratings. It will only give those ratings to funds that beat their benchmark and peers, after fees are deducted and results are adjusted for risk.
Read the full article on Wall Street Journal