5-star funds guarantee good returns5 of 7A fund earns a five-star rating from mutual fund rating and consulting company Morningstar by spectacular past performance. And as all investors should know, past performance is no indication of future results."There is no evidence that superior performance persists. If you buy a top-performing fund, you have no better than a random chance that it will post above average performance," says Mary Ellen McCarthy, a registered investment adviser with Responsible Investing of Brookline, Mass.If you're in the market for an actively managed fund, start with the star rating. But don't buy a fund based on the money it made it other people last year. Related Articles:Hot trends in retirement Active vs. passive tacticsBuild a secure retirementBuilding a portfolioRelated Links:Find a financial plannerPlanning your lifeTarget-date fund analysisTake control of 401(k) advertisement
A fund earns a five-star rating from mutual fund rating and consulting company Morningstar by spectacular past performance. And as all investors should know, past performance is no indication of future results.
"There is no evidence that superior performance persists. If you buy a top-performing fund, you have no better than a random chance that it will post above average performance," says Mary Ellen McCarthy, a registered investment adviser with Responsible Investing of Brookline, Mass.
If you're in the market for an actively managed fund, start with the star rating. But don't buy a fund based on the money it made it other people last year.
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