Our Thinking  ⟩  Signature Research

Our Thinking  ⟩  Signature Research


Signature Research & Methodology

The rationale that underpins our calculations and capabilities


Morningstar Analyst Rating for Funds Methodology

The Analyst Rating reflects Morningstar analysts' forward-looking analysis of a fund, expressed on a five-tier scale with three positive ratings of Gold, Silver, and Bronze, a Neutral rating, and a Negative rating.

Morningstar Fund Analysts | Nov 15, 2011


The Morningstar Analyst Rating for Funds: Analyzing the Performance of the Analyst Rating Globally

We analyzed the global performance of the Morningstar Analyst Rating for funds based on its ability to predict funds' future risk-adjusted returns. Taken as a whole, we find that Analyst Ratings effectively sorted funds based on their average future risk-adjusted returns.

Jeffrey Ptak, James Li | Dec 11, 2017


Morningstar Equity Research Methodology

This document details the methodology behind the Morningstar Rating for stocks, which offers investors and advisors a tool to assess an equity's intrinsic value against its current market price.

Morningstar | Mar 15, 2017


Morningstar Quantitative Rating for Funds Methodology

To expand the number of funds we cover, the Morningstar Quantitative Rating™ for funds is created with a machine learning model that uses the decision-making processes of our analysts, their past ratings decisions, and the data used to support those decisions.

Lee Davidson | Jul 12, 2018


Examining the Morningstar Quantitative Rating for Funds

Read five event studies on the Morningstar Quantitative Rating in its first year of existence. By analyzing the ratings for all funds, we find insights into the Morningstar Category system, fund companies, and fund performance.

Madison Sargis, Timothy Strauts | Aug 27, 2018


Morningstar Style Box Methodology

The Morningstar 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 better portfolios and monitor them more precisely.

Morningstar | Feb 28, 2018


Morningstar Rating for Funds Methodology

This methodology describes the rationale for, and the formulas and procedures used in, calculating the Morningstar Rating™ for funds (commonly called the “star rating”).

Morningstar Analysts | Nov 01, 2016


The Value of a Gamma-Efficient Portfolio

We revisit gamma, to quantify the potential benefits of implementing a gamma-efficient portfolio strategy for an investor. We do this using a framework of seven questions an investor should consider during the portfolio construction process.

David Blanchett, Paul Kaplan | Oct 25, 2017


Morningstar U.S. CMBS General Ratings Methodology

This methodology describes Morningstar’s approach to issuing letter-grade ratings for commercial mortgage-backed securities at issuance and during surveillance.

Morningstar | Feb 01, 2017


A Framework for Analyzing Multifactor Funds

We present a framework to help investors better understand equity multifactor funds approaches to portfolio construction and bring it to life by applying the framework to some multifactor funds in a series of fund profiles.

Alex Bryan, Ben Johnson | Jun 11, 2018


Morningstar Low Carbon Designation

This is the methodology for Morningstar® Low Carbon Designation™, which is assigned to portfolios that have low carbon-risk scores and low levels of fossil-fuel exposure.

Jon Hale | Apr 30, 2018


Morningstar Global Category Classifications - United States

This paper specifies the category classifications Morningstar assigns to managed investment products available for sale in the United States. These categories underpin many signature analytics and ratings provided by Morningstar and facilitate investment analysis and comparisons.

Morningstar | Oct 01, 2018


Active Share in European Equity Funds

We study a subset of European funds investing in European equities to see how their active share has developed over time, and evaluate how the active share measure might be used as a tool to aid fund selection.

By Mathieu Caquineau, Mattias Mottola | Mar 01, 2016


More Moats, More Profits

We find evidence that the presence of economic moats is increasing among the world’s largest firms, suggesting that elevated profit margins relative to historical levels may not completely disappear when the business cycle turns.

Damien Conover | Apr 09, 2018


Morningstar Extended Performance Methodology

Morningstar created extended performance statistics to connect the inception date of a new share class or distribution channel and the inception date of the original portfolio. This helps investors see how the portfolio as a whole has performed over time.

Morningstar | Sep 05, 2018


A Global Guide To Strategic-Beta Exchange-Traded Products

Learn about the state of the global strategic-beta exchange-traded products landscape. As of June 30, 2017, there were 1,320 strategic-beta ETPs, with collective assets under management of approximately $707 billion worldwide.

Ben Johnson | Sep 07, 2017


Morningstar Sustainability Rating for Funds Methodology

The Morningstar Sustainability Rating helps investors use environmental, social, and governance, or ESG, information to evaluate portfolios. The rating provides a reliable, objective way to evaluate how their portfolios are meeting ESG challenges.

Madison Sargis | Oct 31, 2018


Morningstar Portfolio Product Involvement Methodology

The Morningstar Portfolio Product Involvement metrics are holdings-based calculations that use company-level analytics from Sustainalytics, a leading ESG research provider. They reflect the portfolio’s exposure to involvement in a range of products, services, and business activities.

Morningstar | Sep 28, 2017


Morningstar Quantitative Rating for Funds Input Data Methodology

The Morningstar Quantitative Rating™ for funds generates analyst-driven insights for all open-end funds. By ranking funds on a comparable scale, our system lets you quickly see Morningstar's relative opinion for each fund's pillars.

Lee Davidson | Jun 26, 2017


Morningstar Fee Level for Funds Methodology - U.S.

The Morningstar Fee Level for funds was developed to help investors compare an investment vehicle’s relative level of fees with those of similar investment vehicles. The methodology applies to all U.S.–based funds and subaccounts in our database.

Morningstar | Aug 31, 2017


Morningstar Total Return Index Methodology

This document details the methodology for the Morningstar Total Return Index, calculated at the fund level and representing the value over time of one share purchased and owned since inception, assuming all dividends and distributions are reinvested.

Morningstar | Aug 31, 2017


Morningstar Category Average Methodology

Morningstar category averages represent the average return of funds within their category over time. Morningstar creates a daily total return index series, or TRI, as well as monthly, quarterly, and annual averages of return and non-return data for each category.

Morningstar | Aug 31, 2017


Save More Today: Improving Retirement Savings Rates With Carrots, Sticks, and Nudges

Too often plan sponsors focus on improving plan participation instead of on retirement readiness. We explore three broad approaches (employer match contribution, in-plan financial advice, and setting higher savings expectations) to helping boost participant retirement savings and retirement readiness.

David Blanchett | Apr 05, 2017


The Impact of the Default Investment Decision on Participant Deferral Rates: Managed Accounts vs. Target-Date Funds

Using a dataset of 66,297 participants from 195 defined contribution retirement plans that offer either a target-date fund or managed accounts as the plan default investment, we analyze the effect this decision may have on participant deferral rates.

David Blanchett, Daniel Bruns | Oct 17, 2016


Alpha, Beta, and Now... Gamma

Here, we present a concept that we call “Gamma,” designed to quantify the additional value that can be achieved by an individual investor from making more intelligent financial planning decisions.

David Blanchett, Paul Kaplan | Aug 28, 2013


Estimating the True Cost of Retirement

When consumption and funding levels are combined and correctly modeled, the true cost of retirement is highly personalized based on each household's unique facts and circumstances, and is likely to be lower than amounts determined using traditional models.

David Blanchett | Nov 05, 2013

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