I have been using Morningstar.com, but I have never been very familiar with the star rating of Morningstar.com. This time I accidentally saw an article about star rating published by a famous person on Morningstar.com. If I find a treasure, I will get it immediately.

Came to share.

1. Star comparison is based on the same type, which also means that a five-star stock fund and a three-star bond fund cannot be compared.

You need to know which type of fund matches your investment objectives, investment period, and risk tolerance. Only after delineating the type can you enter the step of selecting by using star indicators.

It is worth noting that since the star rating is based on the fund type, when the fund type changes, the star rating may change.

Morningstar's classification of funds is ex post facto, so if the fund's actual investment portfolio is inconsistent with the fund contract, the fund's classification may change.

2. Morning Star Rating is the percentage ranking of a fund in its category based on the fund’s past risk-adjusted return (MRAR), and is the result of a quantitative calculation.

Therefore, a fund with a high star rating does not necessarily mean that it will have excellent performance in the future, and a fund with a low star rating does not necessarily mean that it has no investment value at all.

Two stock funds with the same return rate in the past three years will also have different Morningstar ratings due to their different risks (mainly measured by standard deviation, downside risk coefficient and other indicators), and are not caused by artificial ratings as some investors imagine.

result.

Specifically, if the range returns of Fund A and Fund B are the same, and the downward fluctuation characteristics of Fund A are significantly higher than those of Fund B, then Fund B may receive a higher rating.

In addition, it is worth reminding that because fund managers have a profound impact on fund performance, some investors will have the illusion that changes in fund managers will also affect ratings. However, in fact, Morningstar measures such personnel changes from a qualitative level.

According to the time dimension, Morningstar ratings can be divided into three-year, five-year and ten-year ratings.

The longer the time, the greater the guiding significance of the star rating to investors. A fund that has experienced more than one bull and bear cycle and has excellent MRAR performance will be more valuable than a fund with only three years of excellent MRAR records.

Suitable for prudent long-term investors.

?From the perspective of star distribution, in each time dimension, the first 10% of MRARs are rated as 5 stars; the next 22.5% are rated as 4 stars; the middle 35% are rated as 3 stars; and the next 22.5% are rated as 3 stars.

2 stars; the last 10% are rated 1 star (rounding is used when specifically determining the number of funds for each star rating).

In addition, according to the regulations of the China Securities Regulatory Commission, when the number of similar funds is less than 10, the fund will not be rated.

In addition, QDII funds, money market funds, closed-end funds, capital guaranteed funds, etc. are also not within the scope of the rating.