Fund managers exploit Morningstar star rating system, reveals Harvard/MIT study

Sterrenhemel. Foto door Bas van der Horst via Unsplash
Sterrenhemel. Foto door Bas van der Horst via Unsplash
Fund managers often actively adjust their portfolios to achieve more favourable outcomes in Morningstar comparisons, according to researchers from Harvard and MIT. This strategy is said to lead to higher star ratings, enabling funds to justify higher fees, potentially at the expense of investor returns.
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