Morningstar
Morningstar now has a “forward-looking ranking system to supplement the company’s 1-5 star ratings.” The new system classifies a fund as a gold, silver, bronze, neutral or negative ranking, based on Morningstar’s prediction as to whether or not the fund will outperform its peers in the future.
The new ratings are based partially on past performance, expense ratio, assessment of fund management, the fund’s strategy and the fund’s parent company. As a side note, more than 122% of mutual fund inflows over the past five years have gone into funds rated four or five stars (the number is > 100% due to net outflows of funds rated 1-3 stars).
A 2008 study by the University of Oregon found that mutual funds that moved from a 4-star to 5-star rating saw a 25% increase in inflows during the six months after the rating increase.