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Methodology Documents

Hundreds of Morningstar analysts publish scores of in-depth investment research using our proprietary methodology to provide data like ratings and risk scores.

Key Documents

Methodology Documents

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

Morningstar Research
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.
Methodology Documents

Morningstar Research
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.
Methodology Documents

Patrick Caldon
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.

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Methodology Documents

Morningstar
Morningstar calculates gross returns for funds as a simulation of the returns investors would have received had they not paid any expenses. Here are the formulas.
Methodology Documents

Morningstar
Morningstar reviews and updates our categories annually. Morningstar categories provide the peer groups that Morningstar ratings are based upon.
Methodology Documents

Morningstar Credit Ratings, LLC
This methodology describes Morningstar’s approach to issuing letter-grade ratings for commercial mortgage- backed securities (CMBS) at issuance. Any determination to issue letter-grade ratings is in Morningstar’s sole discretion in accordance with M
Methodology Documents

Matthew Coffina
Since my first StockInvestor cover story in February 2013, I've gradually been laying out the details of my investment strategy--both the high-level principles that make up Morningstar's official philosophy, as well as my personal perspective on how I pl
Methodology Documents

Alexander Prineas
2015 was a big year for Australian ETPs, with notable themes being asset growth, product proliferation, and price cuts. In this issue we explore these themes and why we expect the future to hold more of the same.
Methodology Documents

Philip Straehl
The emergence of buybacks as the dominant source of corporate payout over the past three decades fundamentally changed the way returns are supplied to investors, creating the need for a new return model. We develop total payout (dividends plus buybacks)
Methodology Documents

Matthew Coffina
For most investors, ourselves included, 2015 was a year to forget. The S&P 500 eked out a total return of just 1.4% and would have been down slightly if not for dividends. The Hare did only slightly better, delivering a total return of 1.7% helped by t
Methodology Documents

Russel Kinnel
It was a pretty good year for the economy but a subpar year for investing. Most fund categories were in the red or just slightly in the black in 2015. Falling oil prices, a rising dollar, and our first interest-rate hike since 2006 made for a volatile
Methodology Documents

Morningstar Credit Ratings, LLC
The rating criteria described herein will generally be applied to ratings of RMBS Servicer Advance Receivables securitizations (“Advance Securitizations”) by Morningstar Credit Ratings, LLC (“Morningstar”). The methodology is designed to be easy to under
Methodology Documents

Morningstar Credit Ratings, LLC
The rating methodology described herein will be applied to the new issue and surveillance ratings by Morningstar Credit Ratings, LLC (“Morningstar”) of securities backed by pools of single-family rental properties ("Single-Family Rental Securities"). The
Methodology Documents

David Blanchett
Managed accounts can personalize asset allocation, help with savings goals, and make annuity recommendations. Costs and due diligence are often greater than for target-date funds, but managed accounts’ advantages outweigh the disadvantages. We expect man
Methodology Documents

Morningstar Credit Ratings, LLC
This methodology describes Morningstar’s surveillance approach to rating commercial mortgage-backed securities (CMBS). Morningstar conducts its monitoring and surveillance activities via both an investor-paid subscription platform and an issuer-paid plat
Methodology Documents

Morningstar Credit Ratings, LLC
This guide introduces the reader to the Morningstar CMBS Subordination Model. It starts out with a description of the basic concepts underlying the model and details its primary features. As with any model, ours utilizes a number of assumptions. We endea
Methodology Documents

Morningstar Credit Ratings, LLC
Morningstar’s analysis and considerations for rating securities (“Resecuritization Securities”) backed by CMBS securities (individually, an “Underlying Security”, collectively, “Underlying Securities”) are focused on the resecuritization of a single Un
Methodology Documents

David Blanchett
This paper builds on the Gamma concept by determining the optimal goals-based strategy for financial planning. We find that selecting the right goals to fund and the best way to fund them delivers Gamma.
Methodology Documents

Morningstar Credit Ratings, LLC
The asset-backed securities market in the U.S. has evolved from the first equipment lease and auto loan deals issued in the mid-1980s to a dynamic market where a panoply of consumer assets, commercial assets, operating assets and nontraditional assets ar