Morningstar Votes for Mutual Funds

Updated from 7:02 a.m. EST

Morningstar, the research firm best known for its ratings and analysis of mutual funds, is drawing criticism for what some people perceive as a negative bias toward exchange-traded funds, one of the country's fastest-growing investment vehicles.

Morningstar denies it has a negative ETF bias, but there is anecdotal evidence to support the claim, which is gaining greater currency among industry observers.

"Morningstar rates mutual funds and that's how they make money," says Barry Mishra, chairman of Accounting and Information Management at University of California-Riverside. If people start investing in ETFs at the expense of mutual funds, he believes the business of ranking mutual funds could lose money. ...