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.

The paper outlines category definitions applicable to the Indian OE fund.

Australian category classification system

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

Risk is inherent to investing.

The European Union Taxonomy is a regulatory classification framework designed to identify environmentally sustainable economic activities with the aim of facilitating sustainable investments and addressing concerns about greenwashing. In addition to corp

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

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

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

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.

For funds available for sale in the United States.

The Morningstar Global Multi-Asset Risk Model provides comprehensive portfolio risk analysis for a diverse investment universe encompassing individual equities and managed investments across equity, fixed income, and commodity-focused asset classes.

The paper contains data and product information about Morningstar Australia Equity Research Coverage

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 separate account and model universes track the discretionarily managed and advisory assets of professional investment managers, mainly including asset management firms, strategists, and third-party providers.

The Market Returns framework provides a consistent, rules-based method for calculating equity returns across multiple time horizons.

The more investors traded, the less they made.

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

A methodology for better risk-exposure identification in Morningstar risk models.

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 paper outlines category definitions applicable to the Spanish market.

Morningstar collects TNA and fund size data while also calculating derived fund size metrics. This document describes both the collected data as well as the calculated metrics.

This paper outlines our asset-allocation models and summarizes the underlying methodology. We discuss the inputs, the resulting portfolios, and their expected risks and return expectations.