Summary Box: Morningstar expands fund ratings

AP News
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Posted: Jun 09, 2011 6:30 PM
Summary Box: Morningstar expands fund ratings

EXPANDED RATINGS: Morningstar is expanding its mutual fund ratings by adding an "AAA" scale to supplement its 1- to 5-star system. The new scale, which Morningstar calls "Analyst Ratings," will debut in the fall, the company said Thursday.

FIVE-LEVEL SCALE: The top analyst rating will be "AAA." Further down the scale are funds rated "AA," "A," "neutral" and "negative."

SUBJECTIVE APPROACH: The analyst ratings will assess qualitative factors aimed at giving investors a sense of a fund's prospects. They're based on the judgments of Morningstar analysts. In contrast, star ratings are based on quantitative measures of a fund's past performance.