Nir Kaissar, Columnist

The Fault in Morningstar's Stars

The main problem is that the ratings measure the wrong thing.

October 27, 2017 at 3:56 PM UTC

Updated on

November 7, 2017 at 9:15 PM UTC

Nir Kaissar is a Bloomberg Opinion columnist covering markets. He is the founder of Unison Advisors, an asset management firm.

1509117826_GettyImages-470727606 — Photographer: Ye Aung Thu/AFP/Getty Images

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It’s time for Morningstar to scrap its fund ratings.

The Wall Street Journal took issue with Morningstar’s rating system for mutual funds on Wednesday. Morningstar awards funds up to five stars based on their risk-adjusted performance relative to peers.