what can I do with my mutual fund data to help me select funds and formulate an investing strategy? I'm not sure how Morningstar does their ratings, but it should be related to historic returns. This does not guarantee future results, but it's better than random. The real problem is picking the right sector. Suppose you bought a fund in the housing sector. Maybe the fund is 5 star because it lost only -15% instead of -40% of the index.