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Author: kuvholt2 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76398  
Subject: Re: Morningstar Changing Stars Date: 7/8/2002 12:11 PM
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Morningstar has been planning this change for a few months (that I know of) now. Basically from what I understand, the change will be similar to making the main rating (which used to be the star 1-5 rating compared to all mutual funds) be a star rating 1-5 comparing the fund to other funds in it's same investment group (meaning comparing large growth funds to other large growth funds). The reason for this change is because under the old system, all small value funds were highly rated and all large growth funds were poorly rated because of market trends. This same information was available before on Morninstar.com and they would call this rating the category rating in the past. The problem was after the introduced the category rating, people were still looking at the star rating, and funds were using the star rating for advertising. To address this they eliminated the old star rating system and changed the category rating to be the main rating, and instead of listing the numbers 1 through 5 as the category rating it is now 1 through 5 stars and called the star rating.

Here's a link to Morningstar.com's explination:

http://news.morningstar.com/doc/article/0,1,14898,00.html


On another note they claim to have changed how their style box is determined, moving some funds from one style box to another, without the fund having changed at all.
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