NEW YORK (CNN/Money) - Is there a rating system to determine the best investments for mutual funds for 401(k)s and other accounts?

-- Mike Bouvier, Fairhaven, Mass.

A rating system for mutual funds? Are you kidding? Rating mutual funds is practically a growth industry. Seems like everybody's doing it.

Probably the best known rating system is the "star system" developed by fund-research firm Morningstar, which assigns anywhere from one star (the lowest rating) to five stars (the highest) based on a fund's risk-adjusted performance versus funds with similar investment strategies.

You can get more specifics on the various factors that go into the star ratings by visiting Morningstar's Web site.

Indeed, so many investors invest by the stars, so to speak, that funds with Morningstar's top ratings suck in much more new money in most years than their star-challenged competitors. Morningstar, by the way, is planning to introduce another rating system for funds that will judge them not on the basis of performance but their governance standards, using metrics such as board independence, corporate culture, expenses and fund-manager compensation.

The new governance grades won't replace the old star system. Rather, the two will exist independent of each other. (It will be interesting to see if there's any correlation between top governance grades and top performance rankings.)

But Morningstar is hardly the only organization out there grading or ranking funds.

Value Line, the company that made its reputation with its stock-rating system geared toward individual investors, has also moved into the mutual fund arena and provides ratings on mutual funds. Morningstar has reciprocated by invading Value Line's stock-rating turf with a Morningstar stock-rating system.

And Lipper, a fund research firm that has a higher profile with fund-industry pros than with individual investors, also has a ranking system that it calls "Lipper Leaders."

Essentially, the Lipper researchers rate funds according to their performance in five different criteria -- total return, consistent return, preservation of capital, tax efficiency and low expenses. The idea is that you can pick a fund that jibes with your goals.

So for example, if you're much more concerned about avoiding losses than generating a high return, you could look at funds that rank high in the preservation category, while someone who wants to hold expenses down could look for Lipper Leaders in the expense category. Of course, you can also look for funds that score high in several categories as well.

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Meanwhile, Standard & Poor's, the outfit best known in the investing world for its indexes and bond ratings, is also a player in the fund rating game, while Charles Schwab, the big discount brokerage firm, has its own version of fund ratings, the OneSource Select List, which highlights funds that have performed well versus their peers on the basis of risk, return, expenses, style consistency and other factors.

I'm sure there are other groups out there that rank or evaluate funds, but those are the biggies.

The real issue, of course, is whether picking funds by star gazing or using any of the other ratings system gives you the inside track to superior funds and better performance.

As far as I know, there is no definitive evidence that this is the case. One way or another, all these systems rely primarily on the past performance of the funds they rate. And past performance isn't a very reliable predictor of future performance.

So I certainly wouldn't rely exclusively on any of these rankings -- or all of them in combination, for that matter -- to choose funds for my 401(k) or any other investment account.

That said, however, I don't think it's a bad idea to check out the various rating systems to see how a fund has fared in specific areas that are part of the overall ranking.

By perusing the various ratings, for example, you can get a decent sense of how volatile a fund's returns have been. And while that's no guarantee the fund will remain as volatile in the future, some researchers believe that risky funds tend to stay risky over time.

Similarly, looking at the various ratings might give you an idea of how consistent a fund's returns have been in the past and whether a fund manager has tended to stick with a particular style or jump around a lot. Again, such information won't provide a definite road map for the future. But it could at least give you a glimpse into the way the manager runs the fund.

Keep in mind, managers jump around too, however, so a track record may be meaningless if a new manager has taken over the helm of the fund. And even if it's the same manager, the fund's strategy could change if the present manager leaves.

At the very least, I think you'd certainly want to get an idea of how the fund stands on expenses, since this is at least one area where both you and the fund have some control.

Bottom line: in my opinion, ratings and what goes into them are something you may want to take into account when sizing up a fund, or perhaps in narrowing down a large number of funds to a manageable number of candidates.

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But I wouldn't invest in a fund simply because it has a top ranking, nor would I limit myself only to funds with the highest rating when assembling a portfolio of funds.

In short, stargazing may be fine for astronomy buffs, but it's no certain path to heavenly gains when it comes to investing.

Walter Updegrave is a senior editor at MONEY Magazine and is the author of "We're Not in Kansas Anymore: Strategies for Retiring Rich in a Totally Changed World." He also answers viewers' questions on CNNfn's Money & Markets at 4:40 PM on Mondays.