Methodology Documents

Morningstar has conducted research on active and passive investment strategies and their associated vehicles since 1986.

This paper outlines the key assumptions and details behind our quantitative equity rating methodology.

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.

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.

This paper outlines the key assumptions and details behind our quantitative equity rating methodology.

Morningstar developed the Morningstar Equity Comparables system to give investors and financial professionals an objective benchmark for comparing companies. Morningstar Equity Comparables is genuinely different to other industry classification schemes. We start from the bottom up with comparable companies, as opposed to the top down with sector definitions. For every pair of companies, we determine how similar they are–anywhere from closely comparable to distantly related based on automated analysis of the companies' own business description. We automatically analyse the text of the business description and work out whether companies are talking about similar things as they describe their businesses. Businesses described in similar terms are comparable.

Plan sponsors may not always consider participants’ behavior or needs when selecting target-date glide paths.

A report on investor returns in the United States.

Evaluating 25 asset managers’ approaches to ESG themes.

As asset managers disclose their targets, commitments vary wildly. What's an investor to do?

In this paper, we focus on understanding the key considerations involved in incorporating global equity thematic funds within portfolios. Our findings will be of interest to advisors and individual investors who wish to connect their portfolios to the ev

The EU taxonomy classification system of environmentally sustainable activities and large EU corporations will disclose information that indicates how aligned the company's revenue, operating expenditure, and capital expenditure are to the EU goal of bei

The EU taxonomy classification system of environmentally sustainable activities and large EU corporations will disclose information that indicates how aligned the company's revenue, operating expenditure, and capital expenditure are to the EU goal of bei

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

The paper contains data and product information about Morningstar Australia Equity Research Methodology

The paper contains data and product information about Morningstar Australia Equity Research Coverage

The Morningstar Risk Model is a holdings-based model that helps identify and assess the risk in one’s investments.

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.

Although it's not yet clear in the official figures (and possibly never will be), China has gone from the star of the postpandemic global recovery to facing much bleaker prospects. The lockdowns needed to maintain the country's zero-COVID strategy are cr

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

Article 8 funds register outflows for the first time, while Article 9 funds hold up.

Flows and assets slip but prove resilient amid market uncertainty.

The Morningstar Category™ classification system for funds lets institutions, advisers and investors effectively compare like funds.

The Morningstar Categories for funds in the Europe/Asia/Africa universe were first established in the early years of the UCITS (Undertaking for Collective Investment in Transferable Securities) Directive to help investors make meaningful comparisons betw

The paper defines the Morningstar Categories for the Japan-domiciled open-end funds.

The Morningstar Category™ classification system for funds lets institutions, advisers and investors effectively compare like funds.

The Morningstar Category™ classifications for 529 investment options were introduced in 2010 to help investors make meaningful comparisons between 529 options.

Augmenting investment research with natural language processing for thematic funds.

Detecting factor crowding in Morningstar Risk Factors.

This paper outlines category classifications for portfolios available for sale in the United States.

Methodology Definitions for U.S. Institutional Categories

In our research, we focus on what behaviors and actions influence people’s willingness to trust/delegate/recommend a financial advisor.

In this third edition, we provide an updated view of the rapidly evolving global landscape of climate funds.

Europe and Hong Kong lead the way in terms of ESG practices. The U.S. scores well despite some big companies' involvement in controversies; China plummets.

This is the second of two papers in which we analyze investors’ use of digital trading platforms and their appreciation of their features. Here, we examine which digital trading platform features resonated with investors and which they would rather do wi

The methodology provides information about the currency exposure of the assets and liabilities in which a portfolio is invested.

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

The grades in the Global Investor Experience Fees and Expenses study were based on responses to six questions in a fixed-response survey completed by in-house, market-expert analysts, plus other inputs determined quantitatively by leveraging Morningstar'

As sustainable investing becomes more common, it is important that industry professionals are able to effectively introduce and talk about the subject with clients. This is no easy task, as sustainable investing is multidimensional, with novel nomenclatu

This study seeks to understand Americans’ perceptions of this strategy and consider who may benefit from this approach. We do this through analyzing responses to a survey about their experiences and opinions of group savings, the kinds of personal relati