Beware: Ratings Companies Are Biased

Click on the image above to watch the video.

Investors will often rely on ratings companies as they perform their due diligence. Makes sense - an investor should research investment securities before they make any decisions.

Related: Passive Investing vs. Passive Investor

But what happens if the rating companies themselves, and their methodology, are subject to biases?

Watch the 90 second video below as I illustrate this with Morningstar and the PGIM fund. This is just one example, but it is not unique .