Myths About Rankings Of Mutual Funds

The biggest myth associated with mutual fund rankings is that higher rated funds make better buys. This is not true, as mutual fund rankings may not always be accurate and it is simply not fair to build your investment plans on the basis of such rankings. For many, mutual fund rankings are a way to judge the past performance of funds and predict future performance as well. No doubt, mutual fund rankings are based on exhaustive analysis and research, but the fact remains that the vast majority of rating companies do not take into account other ranking factors such as risk-adjusted performance and volatility.