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.

We recently announced our plans to update the methodology we follow in assigning Morningstar Analyst Ratings to mutual funds, exchange-traded funds, and other managed investments we cover. Here we examine the aggregate impact the methodology change would

China's economy remains in the doldrums. On the one hand, growth bumped up slightly in the second quarter, according to our broad proxy (despite officially reported growth being down), likely spurred by the rebound in credit growth in the first quarter.

A company’s Business Country is a vital data point and is used throughout Morningstar’s products and methodology.

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"

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

Methodology outlining the calculations of fee level for US Insurance fund group

China's economic growth slowdown took a break in the first quarter, as indicated by official GDP and our alternative measures. It's too early to call this a broad credit-driven rebound, since the typical one- to two-quarter lag between credit and economi

Examining the Morningstar Quantitative Rating for Funds

This methodology is applied to HK MPF Funds.

The paper outlines category definitions applicable to the Indian Insurance fund.

The paper outlines category definitions applicable to the Indian OE fund.

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

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

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

Although the threat of a trade war with the United States roiled China's equity markets in 2018, with about a 30% peak-to-trough decline in the Shanghai Composite, surging optimism about a deal between the countries has led Chinese equities to recover al

In 2018, we released our fund flow models into Morningstar's Investor Pulse tool starting with the U.S. market and expanding globally. Based off "The Fall of Funds" paper, we are implementing the probability of fund shutdown model so these insights can b