When I check my Fidelity funds on Yahoo!, I get a CDA rating, ranging from 1 to 99 (lower is better). What does this number refer to? I phoned Fidelity, and it has never heard of it. -- J. Hilowitz

J.,

These mutual fund ratings and rankings are as omnipresent as those grinning photos of

Monica

.

This week

Standard & Poor's

started publishing its own list of "select" funds, a designation awarded on the basis of S&P's analysis of performance and management.

Morningstar

has its risk- and performance-based star ratings. And

Wiesenberger

, a mutual-fund tracking service and data provider (formerly CDA/Wiesenberger, thus the name of the rating), has its owning ranking system.

Here's a quick but slightly thick description: The CDA rating, a percentile ranking (lower is better), is based on the composite performance of a fund over five time periods with a penalty assessed for inconsistencies. The five time periods are the latest two up-market cycles, the latest two down-market cycles and the most recent 12-month period. If the fund has not been around long enough to have two up- and two down-market cycles, then CDA will use one each. If CDA cannot find one up and one down cycle during the fund's tenure, it will not be rated.

The equation gets a lot more complicated from here. I will let Wiesenberger's definition do the explaining:

"The composite performance number (let's call it X) is the average of the percentile ranks for the five (or three) time periods, plus one-half of the mean absolute deviation of the five (or three) numbers. To illustrate, assume the specific percentile ranks for a particular security over the five time periods are 10, 20, 30, 30 and 10. The average of the five numbers is 20, and the mean absolute deviation is 8. (We get the 8 as follows: Take the sum of the absolute difference between each of the five percentile ranks and the average of 20 -- they are 10, 0, 10, 10, 10, or 40 -- then divide by 5, which equals 8.) For this security, our X is 24 (20 + 0.5*8). Now, let's take another security whose five ranks are 20, 20, 20, 20 and 20. Obviously, the average rank is 20, the same as the first security. However, the mean absolute deviation is 0, so X would remain 20. The second security has a better (i.e., lower) X than the first because its performance is more consistent."

Take a breath.

Once composite performance numbers (or Xs) are computed for all funds, they are ranked and given a percentile rating. With the final CDA rating, you get a measure of performance over market cycles with a penalty for inconsistency.

Like Morningstar's star ratings, Wiesenberger uses the past performance numbers to calculate its rankings. And as the standard, often-seen disclaimer goes: Past performance is no indicator of future performance.

I am not suggesting that there is anything wrong with taking a gander at these ratings when assessing an existing holding or a potential purchase. But any ranking should only be used as a small part of the decision-making process. "There is no single number or ranking that will give a final opinion on whether a security should be purchased," says Daniel Roe, a financial planner with

Budros & Ruhlin

in Columbus, Ohio.

TSC

Contributing Editor Brenda Buttner's

guide to getting started.

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