Morningstar Ratings and Future Performance

24 Pages Posted: 20 Oct 2006

See all articles by Paul Gerrans

Paul Gerrans

The University of Western Australia - UWA Business School

Abstract

Morningstar is one of the major ratings suppliers of Australian managed funds. Ratings are a convenient information source for investors. Over time the ratings methodology used by Morningstar in Australia has become more like its North American counterpart. However, Morningstar Australia uniquely retains a commitment to a qualitative dimension to their research. This paper explores the relationship between Morningstar, qualitative and quantitative ratings and future fund product performance. Results do not support predictive power in the ratings, in the relatively short periods available for analysis, using a range of commonly used performance measures.

Suggested Citation

Gerrans, Paul, Morningstar Ratings and Future Performance. Accounting and Finance, Vol. 46, No. 4, pp. 605-628, December 2006. Available at SSRN: https://ssrn.com/abstract=938834 or http://dx.doi.org/10.1111/j.1467-629X.2006.00185.x

Paul Gerrans (Contact Author)

The University of Western Australia - UWA Business School ( email )

Crawley, Western Australia 6009
Australia
61 8 64882910 (Phone)

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