Methodology Documents

Each security in a fund portfolio is assigned a detailed asset classification, known as the Detail Type Id.

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

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

To evaluate the effectiveness of our quantitative star ratings, we conducted portfolio and event studies over a seven-year backtesting period.

Morningstar has 26 main US CEF peer group categories consisting of 10 equity, 14 fixed-income, and two hybrid categories. The fixed-income categories are further subdivided into taxable and municipal groups.

Morningstar’s Strategy Series database identifies and links together investments across a shared management team and shared investment approach (that is, strategy) that are offered as a spectrum of solutions for investors.

A guide that outlines 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 maturity of the fixed-income portfolio.

The Morningstar method for the determination of a significant restructuring event for an investment moving between categories.

Morningstar Category classifications sorts portfolios into peer groups based on their holdings. The categories help investors identify the top performing funds, assess potential risk, and build well-diversified portfolios. Here is how those categories are decided upon and funds assigned to them.

Morningstar Category classifications sorts portfolios into peer groups based on their holdings. The categories help investors identify the top performing funds, assess potential risk, and build well-diversified portfolios. Here is how those categories are decided upon and funds assigned to them.

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 between Investment funds.

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

For funds available for sale in the United States.

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

Morningstar has conducted qualitative, analyst-driven research on 529 plans since 2004. Since July 2012, we have expressed this research through the Morningstar Medalist Rating for 529 College-Savings Plans. An essential complement to our database of investment information and our suite of quantitative research tools, Morningstar's 529 plan analysis has always focused on helping individuals who are saving for education expenses make better investment decisions.

The Morningstar Portfolio Risk Score assesses risk and diversification to help investors, financial professionals, and those who oversee large groups of financial professionals to assess whether the riskiness of the portfolio matches the risk profile of an investor.

The Morningstar Portfolio Product Involvement metrics measure a portfolio’s exposure to involvement in a range of products, services, and business activities.

The paper outlines institutional category definitions.

The paper outlines Morningstar Category definitions.

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

The paper outlines global category definitions.

Morningstar identifies a Primary Share in Market for open-end funds and exchange-traded funds. This is a proprietary data point and the primary share class is identified by the application of a set of hierarchal criteria.

Within the Separate Account and Model Portfolio databases, Morningstar aims to identify and display different return types that bring transparency to these institutional investments.

Originally the data domain within Morningstar known as Managed Investment Data, or MID, had no formal easy-to-consume mechanism for identifying groups of funds or investment types, also known as universes.

The guide describes how common quantitative Morningstar ranks are determined.

Morningstar provides data on individual securities registered in dozens of countries, but researchers evaluating those investments often have a need to study groups of investments as they're branded in a local market.

The Financial Conduct Authority, or FCA, introduced an environmental, social, and governance-related disclosure regime in 2024: the Sustainability Disclosure Requirements that will affect both asset managers and distributors.

Morningstar’s estimated cash flows dataset for mutual funds represents a detailed analysis designed to assess the capital contributions and withdrawals made by fund investors while accounting for the reinvestment of distributions.

The Morningstar Style Box helps investors determine the investment style of a fund. Different investment styles have different levels of risk that lead to differences in returns. The Morningstar Style Box provides an intuitive and visual representation of style that helps investors build better portfolios and monitor them more precisely.

Augmenting investment research with natural language processing.

Manager tenure is the length of time that an investment manager or team of managers has been leading an investment fund.

Morningstar Category averages are designed to represent the average return of funds within their category over time.

Calculation of Tracking Difference and Tracking Error

The Morningstar Risk Models are a suite of multifactor risk models that help investors identify and evaluate the risk of their portfolios using holdings-based analysis.

The Insiders dataset is a compilation of the insider dealings information for companies in the US and UK markets.

This guide explains the Morningstar approach to capturing key governance functions of investment fund management entities for European markets.

Methodology | Version 1.0

An explantion of the rules for the selection of the oldest share class.

Morningstar Sustainalytics’ Portfolio Low Carbon Transition Metrics enable investors to understand the degree to which the greenhouse gas emissions—attributable to a portfolio—differ from its fair-share GHG emissions budget.

This document covers the calculation methodologies under the legislative regime after the changes that are effective from March 31, 2024.

Australian category classification system

Morningstar calculates and produces comparative analytics to aid product users and investors in vehicle-, strategy-, and firm-level analysis. Morningstar's derived data points are meant to illuminate the connections within, as well as the breadth of, the market as a whole.

Version 1.3

The Morningstar Risk Decomposition tool achieves this by breaking down a portfolio's risk into individual factors and holdings. This capability allows users to analyze the origins of both total and active risk within each portfolio.

The Morningstar Risk Models are a suite of multifactor risk models that help investors identify and evaluate the risk of their portfolios using holdings-based analysis.

This document describes an approach for incorporating structured products, or SPs, into the methodology framework of Morningstar Risk Model, or RM, and Morningstar Portfolio Risk Score, or MPRS.

Morningstar launched a database of UK managed portfolios in July 2022.

The Canadian Investment Funds Standards Committee was formed in January 1998 by Canada’s major mutual fund database and research firms to standardize the classifications of Canada-domiciled retail mutual funds. In 2020, CIFSC began work on a framework to identify Canadian investment funds that sufficiently practice responsible investing. The framework was finalized in 2022.

This guide covers several statistics that are derived from rates of return. They include what are commonly referred to as modern portfolio theory statistics as well as several others. They provide information about individual funds and are also used to compare against other funds, usually within fund categories.