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.

Stock Market Outlook: Left-Behind Communication Services Offers the Most Value Today

Long-term flows to U.S. open-end and exchange-traded funds dipped to an estimated $22.2 billion in August 2018 following July's $32.1 billion

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

After last month's outflows, long-term U.S. open-end and exchange-traded funds collected $32.1 billion in inflows.

A Midyear Update on Tortoise Holdings

Investors continue to favor plain-vanilla strategies

Long-term U.S. open-end funds and exchange-traded funds had $22.1 billion in outflows, their greatest outflows since August 2015

The Market-Driven Scenario Analysis tool allows users to select a market index and to specify the percentile dividing the range of the return distribution to determine the impact of user-specified market shocks on factor exposures, portfolio returns, and

This paper seeks to outline the methodology Morningstar uses in calculating the expected future yield as of the portfolio date, from the holdings of the portfolio. The measure is based on Forward Dividend Yield (forward-yield) for stocks and the yield-to

We agree that there's much to be skeptical of with the original robo-advisor business model. In fact, we wrote in 2015 about the challenging economics, how many stand-alone robo-advisors wouldn't survive, and robo-advisors integrated with established fin

U.S. Equity Inflows Surge, While International-Equity and Taxable-Bond Flows Tail Off

The paper outlines category definitions applicable to the Indian market.

Quality recommendations for current income and income growth from stocks.

Investing in the wide-moat stocks of today and tomorrow

Morningstar's cross-listed ETP performance methodology.

Fiduciary responsibility and increased regulations require investors to analyze and understand their risk exposures in a carbon-constrained future. To help investors address this challenge, Morningstar has introduced portfolio carbon metrics that measure

Here is the methodology for this designation, which is assigned to portfolios that have low carbon-risk scores and low levels of fossil-fuel exposure.

Methodology paper explaining how Morningstar calculates the average bond price for a portfolio.

Quality recommendations for current income and income growth from stocks.

Morningstar ETF Managed Portfolios Landscape Report Q4 2017

China has maintained its economic rebalancing to consumption through the first quarter. But this process remains slow, as the Chinese consumer is becoming challenged with higher levels of household debt, and the picture for consumption growth is looking

Investing in the wide-moat stocks of today and tomorrow

Profit margins have expanded rapidly over the past three decades. That, combined with strong optimism for future growth, has driven market earnings multiples to extreme levels. We view overall stock market valuations as stretched, with close to 60% of ou

Quality recommendations for current income and income growth from stocks.