Will M* Take Its Ratings Up a Notch Or Two?
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Wednesday, June 19, 2019

Will M* Take Its Ratings Up a Notch Or Two?

An investment research giant's three mutual fund ratings systems may be in for some changes.

Jeffrey Ptak
Head of Global Manager Research
Jeffrey Ptak, head of global manager research at Morningstar, hints at several possible "next steps" the Chicago-based firm's team might take to improve their star ratings, analyst ratings, and quantitative ratings. Ptak shared those ideas at the end of an assessment as to how well the ratings systems are doing.

After crunching some numbers, Ptak concludes that the ratings are helping investors some but also could be improved. For the analyst and quantitative ratings, both of which are powered by assessments across five pillars, Ptak suggests giving more weight in particular on three of those pillars: parent, people, and process.

Ptak always makes the case for drilling down on cost differences, in part by varying ratings across different fund share classes (which have different fees and performance records). And he wants to take things up a notch or two when it comes to evaluating active funds.

Fundsters curious about the three ratings systems' records in the real world should read Ptak's full report.

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