Methodology Documents

The Morningstar Portfolio Risk Score is designed to help assess whether the riskiness of the portfolio matches the risk profile of an investor.

Version 1.2

A risk model forecasts the distribution of future asset returns. Several features make the Morningstar Risk Models unique.

In 2023, Morningstar combined the Morningstar Analyst Rating and the Morningstar Quantitative Rating into a single, encompassing forward-looking rating, the Morningstar Medalist Rating.

Morningstar created extended performance statistics to “fill in the gap” between the inception date of a new share class or distribution channel and the inception date of the original portfolio. Extended performance lengthens the performance data that is available for the younger investment. This helps investors see how the portfolio as a whole has performed over time.

The advantages and limitations of empirical approaches to long-term wealth forecasting.

Strategy data, coupled with Morningstar's investment-level and rich portfolio holdings data, informs a comprehensive analytical view of where a strategy fits within investor portfolios and the global marketplace.

In this document we present a wide range of analyses of empirical results from the Morningstar Portfolio Risk Scoring system.

The EU taxonomy classification system of environmentally sustainable activities and large EU corporations will disclose information that indicates how aligned the company's revenue, operating expenditure, and capital expenditure are to the EU goal of being net zero by 2050.

Data Content Guide

The Detail Type Id structure is reviewed by Morningstar’s methodology and data experts on an annual basis.

Data content guide.

Morningstar collects data from the SFDR annexes embedded within the prospectus and annual reports for funds that are identified by the manufacturer as Article 8 or Article 9 products.

The EU's sustainability finance disclosure regulation, or SFDR, mandates that certain financial market participants must disclose the principal adverse impacts, or PAIs, of their holdings.

This document covers the calculation methodologies under the legislative regime after the changes that are effective from 31 Dec 2022.

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

With the introduction of the Morningstar Quantitative Rating, we're extending a useful analytic tool to thousands of funds not covered by Morningstar's analyst team.

The tool constructs fund-level portfolios to facilitate the advisor-led models and lineups. A flexible optimization framework is created that allows for a wide variety of optimization problem formulations.

The Morningstar Sustainability Preferences Portfolio Construction Tool creates a portfolio tracking investment policy model while allowing investors to express their unique environmental, social, and governance preferences as defined in terms of product involvement and impact score.

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.

We present a wide range of analyses of empirical results from the Morningstar Portfolio Risk Scoring system.

An integrated client risk-profiling and portfolio risk-scoring system.

The EU taxonomy classification system of environmentally sustainable activities and large EU corporations will disclose information that indicates how aligned the company's revenue, operating expenditure, and capital expenditure are to the EU goal of being net zero by 2050. The EU taxonomy will eventually cover six environmental green "objectives" and will be extended to social objectives and to identify "brown" activities.

The EU taxonomy classification system of environmentally sustainable activities and large EU corporations will disclose information that indicates how aligned the company's revenue, operating expenditure, and capital expenditure are to the EU goal of being net zero by 2050. The EU taxonomy will eventually cover six environmental green "objectives" and will be extended to social objectives and to identify "brown" activities.

As the field of sustainable investing matures, Morningstar continues to evolve its data, research, and analytics to help investors assess the ESG risks and attributes in their portfolios.

Managed accounts (also known as managed portfolios in markets including the United Kingdom) are investment portfolios that are managed by a portfolio manager with discretion over assets at an asset-management firm.

A structured product (also called a structured note) is an investment product that combines a debt issuance with embedded derivatives to create customized payoff profiles. Structured products may have coupon interest and/or principal repayment dependent on the value or return of one or more assets.

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

This paper outlines category classifications for portfolios available for sale in the United States.

Methodology Definitions for U.S. Institutional Categories

Here we explore our quantitative equity ratings, which are empirically driven and based on the proprietary ratings our analysts are already assigning to stocks.

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

Questions and answers for this methodology, which provides information about the currency exposure of the assets and liabilities in which a portfolio is invested.

The grades in the Global Investor Experience Fees and Expenses study were based on responses to six questions in a fixed-response survey completed by in-house, market-expert analysts, plus other inputs determined quantitatively by leveraging Morningstar's comprehensive and extensive global database of managed products.

Morningstar Fee Level for Canada methodology FAQs

Morningstar leverages its vast database of mutual fund holdings to map the company-level data to portfolio holdings and calculate impact metrics at the portfolio level.

This notebook provides users with standardized measures of tracking performance and facilitates peer group comparisons.

The updated style box provides an intuitive visual representation of style that helps investors build better portfolios and monitor them more accurately.

Using the Sustainalytics ESG Impact Framework, Morningstar introduces new impact metrics to help investors evaluate a company's environmental and social impacts, as well as how these play out within an investor's portfolio.

New Zealand Classification System

In March 2004, Morningstar introduced the category classification methodology for Chinese mutual funds. Since that time, there have been significant developments in the Chinese financial market as well as an increase in both the quantity and variety of fund products.

The Morningstar Sustainability Rating is designed to support investors in evaluating the relative environmental, social, and governance risks within portfolios.

We present a wide range of analyses of empirical results from the Morningstar Portfolio Risk Scoring system.

This document explains the methodology behind Morningstar Portfolio Risk Score for evaluating portfolios and determining if they align well with the asset allocations of the Morningstar Target Allocation Indexes.

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

A guide to the Morningstar classification system for Fixed Income, cash and cash equivalents. This methodology document addresses the Morningstar global fixed income classification.

Until now, we have been refreshing our flows models on an ad-hoc basis. Now we have implemented the fund flows model into Morningstar products so these insights can be gleaned in a live setting.

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.

Methdology explaining the Morningstar portfolio level calculations for EU taxonomy

Using corporate legal filings in the United States, United Kingdom, and Canada, Morningstar introduces new gender diversity metrics to help investors evaluate the gender diversity breakdown of officers and boards of directors for public companies as well as portfolios.