The paper looks at Morningstar’s overweighting of “corporate culture” as the major input into what the research firm calls, “corporate stewardship”.
Corporate culture is one of the mushier components, answering questions like “do talented investors spend their careers at this fund firm?”
To see what value the culture rating adds, Pace University professors Aron Gottesman and Matthew Morey took Morningstar’s corporate culture ratings and compared them to fund performance between 2005 and 2010, finding that the two don’t necessarily go hand-in-hand. (Can Corporate Culture Predict Mutual Fund Performance)
Well, the mutual fund rating firm wasn’t going to let this slide without a fight. The WSJ published Morningstar’s retort: