Fund rating refers to the collection of relevant information by fund institutions, and the ranking of funds according to the expectation of returns and risks through qualitative and quantitative analysis according to certain inspection standards. Then the star rating of the fund is generally 1 to 5 stars, and 5 stars is the highest level.

Fund rating agencies need qualified agencies for rating, which is authoritative and credible. There are seven institutions that can engage in fund rating in China, namely Morningstar Information, Tianxiang Investment, Ji 'an Jin Xin, Galaxy Securities, China Merchants Securities, Shanghai Securities and Haitong Securities. It is normal that the same fund may get slightly different ratings in different fund rating agencies.

Generally speaking, graded foundations go through several steps:

First, classify the funds. The risk-return characteristics of different funds are very different. First, we should classify funds according to their types, that is, their investment scope.

Then the fund income is rated, and the evaluation of the fund income is generally based on the historical income of the fund, and the performance of the fund is the highest part of the fund evaluation.

Then the risk-adjusted income of the fund is rated, and the risks of the fund, such as volatility, are considered. Adjust the fund's rate of return through risk assessment.

Finally, the funds are graded according to the five stars. Take Morningstar as an example, the top 10% funds are rated as five stars, the bottom 22.5% funds are rated as four stars, the bottom 35% funds are rated as three stars, the bottom 22.5% funds are rated as two stars, and the bottom 10% funds are rated as 65438+. So it will also lead to a small gap between the two funds, but one has a rating of 5 stars and the other has a rating of 4 stars.