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.

Helping remote workers with retirement managed accounts.

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.

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 Morningsta

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 terminol

A look at Morningstar's Rating for Canada-domiciled funds.

Australian category classification system

How can advisors help their clients calmly and thoughtfully evaluate when to buy? We believe that proper framing--how advisors describe market volatility--can play a beneficial role.

This paper extends the original framework, including the ability to incorporate expectations/assumptions around: 1) active management alpha; 2) a more diversified and appropriate detailed asset allocation; 3) some of the possible benefits associated with

Our first assessment of 100-plus strategies and 40 asset managers.

A new metric from Morningstar helps investors gauge which asset managers take ESG to heart.

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

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

China's economy continued its remarkable rebound in the third quarter, with official real GDP growth accelerating to 4.9% year over year. This is only slightly below 2019 full-year growth of 6.1%, and as such, China has nearly shaken off entirely the eff

Our view that the U.S. economy would experience a very strong long-run recovery from COVID-19 was far from clear earlier in the year, but it has become the consensus view, thanks to several months of strong economic data. Our current forecast is that U.S

Mexico Category Classification System

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 f

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.

Days before the election, the Democrats stand a solid chance of achieving a clean sweep, with Joe Biden winning the presidency and the Democrats recapturing the Senate. Regardless of the exact probability of this event, we think this is the top election

We take a valuation-focused approach.

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.

Given the general movement toward considering ESG factors among traditional funds, we extended our research to see the availability of funds that consider ESG in DC plan offerings.

Income-based program designs show promise for closing the racial wealth gap.

Defined-contribution plans, especially 401(k) plans, are a central part of how Americans save for retirement.

The COVID-19 pandemic has forced an unprecedented experiment with working from home. We estimate 45% of U.S. workers were working from home at the 2020 pandemic peak. However, we shouldn't assume that working from home will be the new normal, as history

There is considerable debate about the long-term impact of COVID-19 on the economy. Many have argued that the coronavirus will dramatically accelerate ongoing shifts in the economy (such as the shift from brick-and-mortar retail to e-commerce), or that i