5 Don'ts When Using Star Ratings 

5 Don'ts When Using Star Ratings

When hunting for a fund, star ratings are a great starting point. They provide a composite, visual measure of a fund’s historical risk-adjusted return compared to peers: in any particular category, funds clocking the top-10% risk-adjusted returns get a five-star rating, followed by the next 22.5%, 35%, 22.5% and 10%, respectively, from four to one stars.But they can also be misleading. Here are five don’ts to consider when checking out the 5-star rated funds.