A Quantitative Study on the Mutual Fund Rating with LDA

In this paper, based on the Morningstar fund rating result in China, a quantitative study on this fund rating with LDA is proposed. And the following conclusions have been drawn from this study. First, quantitative analysis in Morningstar fund rating in China plays an important role and the characters include total return and risk indexes. Second, there is some qualitative analysis concluded in fund rating also. Third, there is a good prediction result for fund data in the same term. But the persistence of the pattern prediction is poor. There are two demonstrations, one is that the patterns got from the data in 2007 are used for 2008 data set and the other is that the pattern got from one term are used for the following five terms in 2007. The results of experiments above show the poor persistence of the pattern predication.