Morningstar Rating System

Morningstar Rating System – This is a rating system that was created by the firm, Morningstar Inc. of Chicago. It will be used to rate open and closed-end mutual funds. And will also be used for separately managed accounts as well as exchange traded funds. This method will rank funds by a system of between one and five stars. It relies upon a risk-adjusting type of performance rating. Under this system fund will be assessed for their down-side risks, as in the case of Treasury bills. This information is available on a subscription basis and available in various forms such as binders and software.