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Five-star
Term category: General Investing, Funds
In 10 words or less: The highest rating given to stocks and mutual funds by Morningstar.

Definition: The highest score available in Morningstar's popular star rating system.

StockJargon Advice: Morningstar is a widely-respected independent research company and its star system is largely synonymous with the mutual fund industry.  Five-star funds are considered to be those that generate superior risk-adjusted returns.  Studies have shown that gaining a five-star ranking leads to more people investing in the fund, so mutual funds try to improve their rankings.

Morningstar also uses this system to rate more than 1,600 stocks.

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Morningstar Guide to Mutual Funds by Christine Benz
Common Sense on Mutual Funds by John Bogle
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Wall Street Journal Guide to Understanding Money and Investments by Kenneth M. Morris

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