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Methodology Documents

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Methodology Documents

Morningstar asks fund companies to send the following information on a monthly or quarterly basis for each of their fixed income and allocation funds.
Methodology Documents

The Morningstar Rating for Funds Methodology provides the theoretical basis and calculation logic for the quantitative star rating.
Methodology Documents

Morningstar's Credit Ratings ("Morningstar") credit rating process builds upon the knowledge of companies, industries, and financial markets that Morningstar has been accumulating for more than a decade. Morningstar’s credit rating methodology is forward-looking and based on fundamental company research including but not limited to our expectations of future cash flows.
Methodology Documents

This document describes the methodology behind the Morningstar Analyst Rating™ for funds; the summary expression of our forward-looking analysis of a fund. Ratings are assigned globally on a five-tier scale. Our global analyst team has identified five key areas that we believe are crucial to predicting the future success of funds: People, Parent, Process, Performance, and Price.
Methodology Documents

This document provides instructions and guidance for portfolio data providers to complete Morningstar's Advanced Portfolio Template (the "APT")
Methodology Documents

Morningstar calculates cash flows in-house on a monthly basis for open-end funds and non-US ETFs and on a daily basis for US ETFs using total net assets and returns for different time periods.
Methodology Documents

A master-feeder fund structure allows asset managers to consolidate multiple portfolios into one, therefore realizing economies of scale, resulting in more efficient and effective investment management and achieving operational cost & tax efficiency
Methodology Documents

The paper discusses the characteristics of virtual share class shares which have no independent legal profile of their own and are identical in all other respects to the base currency class of the fund.
Methodology Documents

Effective June 30, 2003 Morningstar replaced median market capitalization with geometric average capitalization as a measure of size for a fund's portfolio.
Methodology Documents

Diversified U.S. equity funds and diversified foreign equity funds are categorized based on the three-year average of the fund’s Style Box coordinates (Raw X Value-Growth Score, Raw Y Size Score).
Methodology Documents

To help investors understand the different levels of risk of investing in the various categories of funds, Morningstar will calculate a risk level for each of its fund peer group.
Methodology Documents

Each security in a fund portfolio is assigned a detailed asset classification, known as the Detail Type Id. In September 2011 Morningstar updated the list of Detail Type codes.
Methodology Documents

Performance attribution analysis consists of comparing a portfolio's performance with that of a benchmark and decomposing the excess return into pieces to explain the impact of various portfolio management decisions.
Methodology Documents

In Canada, Fixed Income funds that are displayed on Morningstar tools may be subject to two different methodologies depending on which tool they appear on.
Methodology Documents

The updated Morningstar Style Box provides an intuitive visual representation of style that helps investors build better portfolios and monitor them more accurately. This methodology document addresses the Morningstar Fixed-Income Style Box™. The Morningstar Style Box helps investors and advisors determine the investment style of a fund.
Methodology Documents

The data that drive the fixed income style box is surveyed from fund companies. Morningstar asks fund companies to send the following information on a monthly or quarterly basis for each of their fixed-income and allocation funds.
Methodology Documents

Over the last decade, hedge funds have proliferated and become an accepted allocation within institutional investor portfolios. But there is not a generally accepted definition of what constitutes a hedge fund.
Methodology Documents

Sector groups and sectors can be defined by the parameters detailed in the methodology and based on the portfolio statistics of the most recent portfolio holdings data
Methodology Documents

There are multiple ways to define a fund’s inception date for purposes of return and ratings calculations.
Methodology Documents

Portfolio diversification is generally thought of in terms of market capitalization and investment style, yet sector diversification is equally important.
Methodology Documents

Investors often evaluate how reasonable a stock’s price is by looking at a price ratio, such as price-to-earnings (P/E), price-to-book (P/B), price-to-cash flow (P/C), or price-to-sales (P/S).
Methodology Documents

Morningstar's Strategy Database identifies investment undertakings managed by a single team following the same investment process.
Methodology Documents

Synthetic ETFs are exchange-traded funds that use over-the-counter derivatives to replicate an index return.