The rating agency Morningstar has spruced up its rating system, which “hasn’t proved to be very predictive for future performance and volatility” and has “lost its luster because of the indexing craze.” This according to an article in Barron’s.

The article reports that the revised system applies a zero-fee benchmark hurdle when analyzing funds which, while helpful to investors, will hurt managers. According to the firm’s head of global manager research Jeffrey Ptak, of the 556 share classes rated so far under the new system, there have been twice as many downgrades as upgrades.

The article outlines changes in the new system, which include separate ratings for each share class (which resulted in downgrades for those with the highest fees). Previously, the ratings were based on five “pillars”; Parent, People, Performance, Price and Process, but in the new version Price and Performance have been combined with the others—so, now fees are “tied to performance to see what the value add is for them.”