Jason Zweig on Morningstar Star Ratings
Over the past months, my articles on Seeking Alpha have received a number of comments reflecting the debate about the reliability of Morningstar’s star ratings as tool for analyzing a fund’s likely performance.
This debate is best summarized in the following quote from commentary by Jason Zweig in which he points out the reasons why more winning mutual funds don’t stay winners.
“A leading investment research firm, Morningstar, awards ‘star ratings’ to funds based on how much risk they took to earn their returns (one star is the worst,