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March 05, 2018 at 05:01 PM
Morningstar is expanding its ratings system to thousands more funds through the launch of the Morningstar Quantitative Rating system.
The new ratings system essentially extends the reach of Morningstar Analyst Ratings using machine learning.
Morningstar’s Analyst Ratings cover approximately 1,800 open-end mutual funds and ETFs. The Quantitative Rating is available for 10,000 funds representing more than 30,000 share classes in the U.S. Funds will have either rating but not both.
Like the Analyst Rating, the Quantitative Rating is a forward-looking assessment of a fund’s ability to outperform its peer group or benchmark on a risk-adjusted basis over a market cycle. It also uses the same labels as the Analyst Rating: gold, silver and bronze plus neutral and negative, based on the same Morningstar pillars: parent firm, people, performance, price and process.
(Related: Morningstar Finds Its Analyst Ratings Can Predict Future Performance)
