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Methodology Documents

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Methodology Documents

This document explains the methodology behind Morningstar Portfolio Risk Score for evaluating portfolios and determining if they align well with the asset allocations of the Morningstar Target Allocation Indexes.
Methodology Documents

The Morningstar Rating for Funds Methodology provides the theoretical basis and calculation logic for the quantitative star rating.
Methodology Documents

Until now, we have been refreshing our flows models on an ad-hoc basis. Now we have implemented the fund flows model into Morningstar products so these insights can be gleaned in a live setting.
Methodology Documents

Morningstar identifies a Primary Share in Market for open-end funds and exchange-traded funds. This is a proprietary data point and the primary share class is identified by the application of a set of hierarchal criteria.
Methodology Documents

Methdology explaining the Morningstar portfolio level calculations for EU taxonomy
Methodology Documents

Using corporate legal filings in the United States, United Kingdom, and Canada, Morningstar introduces new gender diversity metrics to help investors evaluate the gender diversity breakdown of officers and boards of directors for public companies as well as portfolios.
Methodology Documents

Morningstar Category classifications sorts portfolios into peer groups based on their holdings. The categories help investors identify the top performing funds, assess potential risk, and build well-diversified portfolios. Here is how those categories are decided upon and funds assigned to them.
Methodology Documents

In March 2004, Morningstar introduced the category classification methodology for Chinese mutual funds. Since that time, there have been significant developments in the Chinese financial market as well as an increase in both the quantity and variety of fund products.
Methodology Documents

The Morningstar Globe Rating for companies is a visual representation of the Sustainalytics ESG Risk Classification that will allow investors to easily identify securities with low ESG risk.
Methodology Documents

The Globe Rating for companies is a visual representation of the Sustainalytics ESG Risk Classification that will allow investors to easily identify securities with low ESG risk.
Methodology Documents

In this updated and expanded report, we build upon our original examination of synthetic exchange-traded funds in Europe, describing how the split between physical and synthetic ETFs in Europe has evolved in the past decade, citing the causes for the fall in popularity of the synthetic structure and why investors are again expressing interest in it for exposure to mainstream US equity indexes.
Methodology Documents

Crowd Sense helps investors gain a broader picture of investment popularity and places that popularity in the context of the underlying appeal of the investment.
Methodology Documents

The Disclosure grades issued in the Global Investor Experience study were based on the answers to 30 questions in a fixed-response survey completed by in-house, country-expert analysts, plus other inputs determined quantitatively by leveraging Morningstar's comprehensive and extensive global database of managed products.
Methodology Documents

The Morningstar ESG Commitment Level offers a qualitative, analyst-driven evaluation of investment strategies and asset managers from an environmental, social, and governance perspective.
Methodology Documents

The Morningstar Style Box™, sometimes referred to as the Equity Style Box, was introduced in 1992 to help investors and advisors determine the investment style of a fund. It provides an intuitive visual representation of style that helps investors build better portfolios and monitor them more precisely.
Methodology Documents

Morningstar aims to meet growing regulatory demand by providing a method of ranking the universe of funds available for sale in a target market or regulatory jurisdiction.
Methodology Documents

As the field of sustainable investing matures, Morningstar continues to evolve its data, research, and analytics to help investors assess the environmental, social, and governance, or ESG, risks and attributes in their portfolios.
Methodology Documents

Morningstar has conducted qualitative, analyst-driven research on 529 plans since 2004. Since July 2012, we have expressed this research through the Morningstar Analyst Rating for 529 College-Savings Plans accompanied by written analysis. An essential complement to our database of investment information and our suite of quantitative research tools, such as the Morningstar Rating for 529 investment options, Morningstar's 529 plan analysis has always focused on helping individuals saving for education expenses make better investment decisions.
Methodology Documents

Fixed income investors can find their portfolios exposed to many different types of risk. These risks can affect whether their investment objectives are achieved. Portfolio breakdowns are a traditional means of analyzing risk. They have a critical shortcoming, however, in that they hide the way individual risks are interrelated. Fixed Income Exposure Analysis solves for this shortcoming by combining attribute breakdowns and calculating related risks. The relationships between different risk types are revealed, allowing investors to understand with greater precision and detail the contributors of risk and return that have an impact on portfolio performance.
Methodology Documents

Explanation of the methodology behind the Morningstar distribution analysis fields.
Methodology Documents

Morningstar Category classifications sorts portfolios into peer groups based on their holdings. The categories help investors identify the top performing funds, assess potential risk, and build well-diversified portfolios. Here is how those categories are
Methodology Documents

The Morningstar Fee Level for mutual funds was developed to help investors compare an investment vehicle's relative level of fees with those of similar investment vehicles. There are four different fee levels: Morningstar Fee Level--Broad, Morningstar Fee Level--Distribution, Morningstar Fee Level--Variable Products, and Morningstar Fee Level--Insurance Funds. This methodology applies to all U.S.-based mutual funds and subaccounts in Morningstar's database.
Methodology Documents

Morningstar is undertaking a multistage effort to assess the current landscape and educate the investment community on manager intentionality toward ESG, or sustainable investing. The first stage of this effort is the launch of two sets of intentionality indicators, one built around identifying intentionally sustainable strategies and the other focused on identifying the use of exclusionary screens.
Methodology Documents

Morningstar is undertaking a multistage effort to assess the current landscape and educate the investment community on manager intentionality toward ESG, or sustainable investing. The first stage of this effort is the launch of two sets of intentionality indicators, one built around identifying intentionally sustainable strategies and the other focused on identifying the use of exclusionary screens.
Methodology Documents

To help investors better analyze managed funds along the increasing number of factor dimensions, we introduce the Morningstar Factor Profile, a scientific and intuitive tool to capture the factor exposures of investment portfolios.
Methodology Documents

Morningstar is making revisions on the industry group and industry level in response to market and technology changes. The revised system calibrates the classifications to align more closely with industry standards, clarifies industry definitions, and better reflects industry trends to allow for a more accurate grouping of companies based on market behavior.
Methodology Documents

Morningstar enhances the current Morningstar Sustainability Rating methodology by replacing Sustainalytics' company ESG Rating with its ESG Risk Rating.
Methodology Documents

Target-date funds are designed to be a simple, all-in-one solution that is relatively easy for investors to use. However, these simplifying features can make target-date funds tricky to evaluate. Morningstar Target-Date Fund Series Reports ("the Reports") are designed to help individual investors, financial advisors, consultants, plan sponsors, and other interested fiduciaries make informed decisions when selecting a series of target-date funds.
Methodology Documents

The ability to model the risk of a portfolio is paramount to making investment decisions that maximize utility. Our fundamental factor-based methodology provides a way to forecast risk, but, more important, it provides an intuitive interpretation of the mechanics behind the forecast.