We are no strangers to the rating of funds. When we browse a single fund, there are often a few "little stars" in front of us, but we don't pay attention to them. These "little stars" are the ratings of funds by fund rating agencies.

Introduction to Fund Rating Fund rating refers to that fund rating agencies collect relevant information, and through scientific qualitative and quantitative analysis, according to certain standards, predict the risks that investors need to bear and the benefits they can get after investing in a fund, and rank the funds according to the expectations of benefits and risks.

The ranking methods include fund income, risk size, risk-adjusted income and so on. Among them, the expectation of fund risk and fund income is mainly based on the historical data of the fund.

Most institutions use star rating, 1 ~5 stars. The higher the star rating, the better the rating.

What are the fund rating agencies? At present, there are many institutions that rate funds, mainly in two categories.

(1) Foreign fund rating agencies include American Morningstar rating and Standard & Poor's rating.

(2) Domestic

According to the regulations of China Asset Management Association, there are currently seven institutions that can engage in fund rating business.

Three fund research institutions: Morningstar Information, Tianxiang Investment and Ji 'an Jin Xin.

Four brokerage fund research departments: Galaxy Securities, China Merchants Securities, Shanghai Securities and Haitong Securities.

In addition, three official media (china securities journal, shanghai securities news and Securities Times) can engage in fund awards business, corresponding to Golden Bull Award, Golden Foundation Award and Star Fund Award respectively.

According to the historical performance of the fund in the market and taking into account the risk factors, the rating agencies divide the performance of the fund into five grades, which are assigned to AAAAA, AAAA, AAA, AA and A respectively.

Each institution has its own fund rating standard. For example, the core idea of Public Offering of Fund rating of Shanghai Securities is to evaluate Public Offering of Fund's long-term performance ability. They think that Public Offering of Fund's active management ability can be divided into three parts: securities selection ability, opportunity selection ability and risk control ability.

It is normal for the same fund to have a poor rating within one week at the same time.

Steps of fund classification: 1. First, classify the funds. The risks and benefits of different types of funds are different. For the fairness of rating, funds are first classified according to the investment scope.

2. Measure the income of the fund. Morningstar uses the monthly rate of return to measure the fund's income. The monthly rate of return reflects the income that investors get from holding funds in a specific month.

3. Calculate the risk-adjusted income of the fund. Morningstar adjusts the fund's rate of return by "punishing risks"; The greater the fluctuation, the more punishment. It is equivalent to two funds with the same income, and the adjusted income with large fluctuations is lower.

4. According to the star level, it is divided into five stars. According to the risk-adjusted income, the fund ranks from big to small: the former 10% was rated as 5 stars; The next 22.5% was rated as 4 stars; The middle 35% was rated as 3 stars; Then 22.5% was rated as 2 stars; Finally, 10% was rated as 1 star.

Through the steps of fund rating, it is obvious that fund rating is an upgraded version of fund ranking. Fund ranking is just a pure quantitative evaluation, which only uses the data of income, while fund rating considers factors such as fluctuation. Compared with fund ranking, fund rating pays more attention to long-term performance, uses richer and more comprehensive data, and the results are more objective and professional.