Skip to Content
Fund Spy

The Morningstar Factor Profile: A New Lens for Analyzing Funds

The Morningstar Factor Profile complements the Morningstar Style Box, incorporating additional factors that further explain funds’ exposures to well-documented sources of long-term returns.

Mentioned: , ,

In 1992, Morningstar introduced the Morningstar Style Box as a means of classifying stock funds based on the size and value/growth orientation of their holdings. This framework has since been widely adopted as a means of categorizing and analyzing funds. In the nearly three decades since the style box debuted, our understanding of the different factors that explain stock returns has advanced. While size and value/growth exposures can help explain the difference between funds’ long-term returns, they don’t tell the full story. The Morningstar Factor Profile is a new lens that complements the Morningstar Style Box, incorporating additional factors that further explain funds’ exposures to well-documented sources of long-term returns.

Painting a Fuller Picture
The Morningstar Factor Profile provides a snapshot of funds’ exposures to seven different factors. These factors are common characteristics of stocks that can help to explain their long-term returns relative to the broader market. Each has been well-documented and vetted in academia and implemented by investment practitioners.

Ben Johnson has a position in the following securities mentioned above: IJR. Find out about Morningstar’s editorial policies.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.