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6 responses to “Have Mutual Fund Rating Agencies Lost Their Mojo?”

  1. James Watkins

    As usual, excellent article Chris. Great points throughout.

    As investment professional, we know that any ranking service is just a beginning point. As Mr. Massa points out, investment professionals are responsible for doing their own due diligence. This is a mistake that a lost of plan spsonsors make. The courts have held that any reliance on third party research must, at a minimum, be reasonable, with “reasonable” being defined as “independent and impartial” and “extensive and objective,” folowed-up by the fiduciary’s own due diligence.

    Morningstar is often criticicized for its star system and the pack of persistence of such rating. While the lack of persistence has been well documented, it should be noted that Morningstar has openly stated that its star system is based on past perfomance and is neither intended to be, nor should be, used as a basis for predicting future perfomance.

    Once again, excellent article.

  2. 10 Sunday Reads | The Big Picture

    [...] estimates need adjusting (Reuters) see also Have Mutual Fund Rating Agencies Lost Their Mojo? (Fiduciary News) • Channeling Marshall McLuhan Markets to Washington: You know nothing of our work   [...]

  3. WallStreetRanter

    How is it that all these advisors don’t know that morningstar has more then just star ratings? They do have forward looking ratings called analyst ratings…Gold, Silver, Bronze, Neutral & Negative.

  4. Weekly roundup of great personal finance articles from around the web

    [...] Have mutual fund rating agencies lost their mojo? (Fiduciary News). On the usefulness and limitations of mutual fund ratings agencies like Morningstar. [...]

  5. Elmer Rich

    Recent research suggests that both administrators and employees chase performance with serious penalties.

    Significant research also suggest professional managers benefit mainly from luck. There is little evidence for skill in investment management – anywhere.

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