Morningstar is an independent company that has been evaluating mutual funds for over 20 years. Considering there are well over 10,000 mutual funds to look through; services like these can be helpful in narrowing down your selections.
Mutual funds are given Morningstar ratings based on the 5-star system listed below:
- Five Stars: the fund produces substantially above-average returns.
- Four Stars: the fund produces above-average returns.
- Three Stars: the fund produces average returns.
- Two Stars: the fund produces below-average returns.
- One Star: the fund produces substantially below-average returns.
Of course please remember these ratings do not guarantee a funds performance. Resources like these should be used to narrow your choices down, but in the end the decision is still your responsibility.