Alternatives are hot in the mutual fund world-- and Morningstar isn't going to get left out in the cold.

The famous fund raters have started to release Morningstar Analyst Ratings for about 40 alternative mutual funds. The funds hold around 75 percent of the assets in the alternative fund industry. Within the next year Morningstar hopes to have ratings for close to 100 funds.

The funds will have three "positive" ratings--gold, silver and bronze--to go along with a "neutral" rating and, of course, a "negative" rating. In the first round of ratings only one alternative was given the gold, while six got tagged "negative."

“The strategies employed in alternative funds are often new and sometimes complex. Our goal with the Analyst Ratings and Global Fund Reports for these alternative investments is to help institutions and financial advisors research and compare funds as they continue to seek diversification through alternative investments,” stated Nadia Papagiannis, director of Morningstar’s alternative fund research.

The funds will be rated based on Morningstar's "five pillars"-- people, process, parent, performance and price. 

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