The Morningstar Rating is a measure of a fund’s risk-adjusted return, relative to similar funds. Funds are rated from 1 to 5 stars, with the best performers receiving 5 stars and the worst performers receiving a single star. … This concept is the basis for how Morningstar adjusts for risk.

If a fund receives a positive rating of Gold, Silver, or Bronze, it means Morningstar analysts think highly of the fund and expect it to outperform over a full market cycle of at least five years. The Analyst Rating is not a market call, and it is not meant to . . . Read more

Gold-rated funds are our top recommendations within their Morningstar Categories. Our evaluation of their key pillars leads us to expect Gold-rated to Morningstar Category peers (or the Morningstar Category benchmark, if the fund is actively managed) by the widest margin, after fees.

In simple terms, the Morningstar ratings system is a tool investors can use to compare mutual funds and ETFs. And if you’re wondering whether Morningstar ratings are legitimate, the answer is yes. Even FINRA, the Financial Industry Regulatory Authority, using Morningstar ratings in its Market Data Center .

How does Morningstar make money? We generate revenue by selling a variety of investment-related products and services. … We also sell advertising on our websites and generate transaction-based revenue for credit ratings.

Morningstar is a highly regarded mutual fund and exchange-traded fund (ETF) rating agency. … A study performed by Vanguard found that Morningstar’s ratings were not a good method to predict performance when measured against a benchmark.

A 5-star rating means the stock is undervalued and trading at an attractive discount relative to its fair value estimate.

Funds whose risk-adjusted returns fall within the top 67.5% relative to category peers receive a 3-star rating.

Morningstar is a highly regarded mutual fund and exchange-traded fund (ETF) rating agency. … Morningstar itself acknowledges its rating system as a quantitative measure of a fund’s past performance that is not intended to accurately predict future performance.

Analyst Ratings are continuously monitored and reevaluated at least every 14 months. How does the Morningstar Analyst Rating work? Morningstar fund analysts assign the Analyst Rating to funds that have garnered the most investor interest and assets.