Analyst Rating concerns:
- As the Motley Fool points out in their cleverly-named post on the subject, the analyst ratings may suffer from the same systematic positivity as stock analysts.
- This article from Dan Wiener at InvestorPlace points out several inconsistencies in the ratings, such as rating two Vanguard funds that follow the S&P 500 differently.
- The Wall Street Journal points out that the analyst picks and pans, on which the new Analyst Ratings are based, have a pretty poor record. Only 46% of picks beat their index benchmark.
- They started by rating only about 350 funds, and hope to expand to about 1,500. Given that there are over 7,000 US mutual funds, it is unclear how they will decide what to rate in a way that is fair.