General Question

GeorgeGee's avatar

Why does Fidelity Magellan Fund get a 3 star, "average" Morningstar 10 year rating?

Asked by GeorgeGee (4920points) November 2nd, 2010

Ten years ago, Fidelity Magellan fund shares were worth twice what they are today, so investments in their fund have lost an average of 5% every year. How does this merit a 3-star rating? Or are the ratings more meaningless sales hype?
http://www.google.com/finance?q=MUTF%3AFMAGX

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3 Answers

bob_'s avatar

Your link doesn’t work. Try this one.

Ratings are done by comparing a fund’s performance against peers. While this one did pretty bad, others, apparently, did worse.

skfinkel's avatar

We’ve been through some pretty rough financial waters over the last few years. And none of these funds did that well. Which means to me that this is all a crap shoot, and no one seems to know more than another what is really going on. If someone knows a fund that moved out of stocks and into cash while the market tanked, I would love to know about it.

YARNLADY's avatar

Yes, as @bob_ it is a comparative rating. There may also be a factor included that addresses the stability of the company, versus one that is on the brink of disaster.

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