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Methodology Documents

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Methodology Documents

Closed-end funds can borrow money to help finance the acquisition of their investment portfolio with the hope of enhancing shareholder returns. It gives the fund managers freedom to take advantage of a long-term view, or to quickly act upon a favorable situation with a particular stock without having to sell existing investments to raise the necessary cash.
Methodology Documents

Strategy data, coupled with Morningstar's investment-level and rich portfolio holdings data, informs a comprehensive analytical view of where a strategy fits within investor portfolios and the global marketplace.
Methodology Documents

Morningstar has conducted qualitative, analyst-driven research on 529 plans since 2004 and rated plans since July 2012. An essential complement to our database of investment information and our suite of quantitative research tools, such as the Morningstar Medalist 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

Morningstar uses a series of six individual models working in unison to algorithmically assess a vehicle and assign the People, Process, and Parent Pillar ratings to it for those assigned Directly, by Algorithm.
Methodology Documents

Morningstar Sustainalytics Low Carbon Transition Rating assesses the degree to which a company’s projected Greenhouse Gas Emissions (GHG) differ from its fair-share budget for GHG emissions.
Methodology Documents

This document describes an approach for incorporating structured products, or SPs, into the methodology framework of Morningstar Risk Model, or RM, and Morningstar Portfolio Risk Score, or MPRS. This allows investors to assess the risk, in terms of expected return volatility, of a portfolio that contains structured products and other assets such as stocks and bonds.
Methodology Documents

This document describes the rationale for, and the formulas and procedures used in, calculating the Morningstar Rating for funds (commonly called the “star rating”). This methodology applies to funds receiving a star rating from Morningstar.
Methodology Documents

Morningstar ESG Commitment Level has supplemented our ratings work with a distinct, qualitative, analyst-driven evaluation of asset managers from an environmental, social, and governance perspective.
Methodology Documents

The Low Carbon Designation is an indicator that the companies held in a portfolio are in general alignment with the transition to a low-carbon economy.
Methodology Documents

The portfolio carbon risk metrics aim to help investors identify, quantify, and manage climate-related investment risks, while the percentile and absolute ranks are intended to support informed investment decisions by allowing for comparison of carbon-related risks against peers.
Methodology Documents

This document provides details on the methodology underlying the suitability framework in the Morningstar Risk Profiler.
Methodology Documents

The Morningstar Portfolio Risk Score is designed to help assess whether the riskiness of the portfolio matches the risk profile of an investor.
Methodology Documents

Morningstar is introducing "representative cost" fields that will contain the best information on the recurring costs that are charged via the fund itself, and so would not include one-off costs or costs charged by third parties such as advisors or platforms, nor one-off costs charged on entry or exit.
Methodology Documents

Morningstar created extended performance statistics to “fill in the gap” between the inception date of a new share class or distribution channel and the inception date of the original portfolio. Extended performance lengthens the performance data that is available for the younger investment. This helps investors see how the portfolio as a whole has performed over time.
Methodology Documents

The advantages and limitations of empirical approaches to long-term wealth forecasting.
Methodology Documents

The Detail Type Id structure is reviewed by Morningstar’s methodology and data experts on an annual basis.
Methodology Documents

The EU's sustainability finance disclosure regulation, or SFDR, mandates that certain financial market participants must disclose the principal adverse impacts, or PAIs, of their holdings.
Methodology Documents

With the introduction of the Morningstar Quantitative Rating, we're extending a useful analytic tool to thousands of funds not covered by Morningstar's analyst team.
Methodology Documents

We believe that a company's intrinsic worth results from the future cash flows it can generate. The Morningstar Rating for stocks identifies stocks trading at a discount or premium to their intrinsic worth--or fair value estimate, in Morningstar terminology.
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

Mapping a client's level of risk comfort to the Morningstar Portfolio Risk Score.
Methodology Documents

An integrated client risk-profiling and portfolio risk-scoring system.
Methodology Documents

Managed accounts (also known as managed portfolios in markets including the United Kingdom) are investment portfolios that are managed by a portfolio manager with discretion over assets at an asset-management firm.
Methodology Documents

A structured product (also called a structured note) is an investment product that combines a debt issuance with embedded derivatives to create customized payoff profiles. Structured products may have coupon interest and/or principal repayment dependent on the value or return of one or more assets.
Methodology Documents

Here we explore our quantitative equity ratings, which are empirically driven and based on the proprietary ratings our analysts are already assigning to stocks.
Methodology Documents

Questions and answers for this methodology, which provides information about the currency exposure of the assets and liabilities in which a portfolio is invested.