Do your mutual funds deserve a medal? Many investors don’t realize that the widely followed mutual fund research firm Morningstar Inc. offers various medal ratings—bronze, silver and gold (the top rating)—in addition to its much more familiar star ratings to evaluate thousands of funds.

This October, Morningstar has tweaked the medal-ratings system in a move that should improve the value of the system in helping investors select ­mutual funds.

While the star ratings focus on only past performance, the medals system, which is based on subjective ratings from Morningstar analysts, is meant to predict the likelihood that a mutual fund will beat its peers and/or its benchmark index over the next five years. 

In addition to past performance, the medals system takes into consideration other criteria such as how consistent the fund’s strategy is…how long the fund’s manager has been in place…and the quality of the fund’s parent company. 

The new changes put greater weight on the fees that a fund charges and how those fees affect performance—a measure that has taken on increased importance as many investors shift from actively managed funds to less costly, passively managed funds that track an index. High fees can undercut performance significantly over the long run. 

My advice for using the two ratings systems: I want the funds that I invest in to have four or five stars as well as a gold or silver medal. There were recently 1,194 funds that achieved both these levels—out of 21,415 rated funds—coupling superior past returns with a good shot at maintaining them in the future.