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Methodology Documents

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Methodology Documents

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.
Methodology Documents

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

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.
Methodology Documents

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

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.
Methodology Documents

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

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.
Methodology Documents

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.
Methodology Documents

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.
Methodology Documents

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.
Methodology Documents

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.
Methodology Documents

Commodity Focus Group and Commodity Focus provide an attribute schema for commodities-focused ETF strategies that is granular enough to capture the diversity of the commodities landscape.
Methodology Documents

The EU taxonomy is a classification system of environmentally sustainable activities that require large EU corporations to 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.
Methodology Documents

As a comparative measure of the cost of implementing each portfolio, Morningstar calculates the Prospective Acquired Fund Expense for vehicles within the U.S. and U.K. markets.
Methodology Documents

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

Closed-end funds can borrow money to help finance the acquisition of their investment portfolio with the hope of enhancing shareholder returns. It gives the fund managers freedom to take advantage of a long-term view, or to quickly act upon a favorable situation with a particular stock without having to sell existing investments to raise the necessary cash.
Methodology Documents

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.
Methodology Documents

Morningstar has conducted qualitative, analyst-driven research on 529 plans since 2004 and rated plans since July 2012. An essential complement to our database of investment information and our suite of quantitative research tools, such as the Morningstar Medalist Rating for 529 investment options, Morningstar's 529 plan analysis has always focused on helping individuals saving for education expenses make better investment decisions.
Methodology Documents

Morningstar uses a series of six individual models working in unison to algorithmically assess a vehicle and assign the People, Process, and Parent Pillar ratings to it for those assigned Directly, by Algorithm.
Methodology Documents

Morningstar Sustainalytics Low Carbon Transition Rating assesses the degree to which a company’s projected Greenhouse Gas Emissions (GHG) differ from its fair-share budget for GHG emissions.
Methodology Documents

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. This allows investors to assess the risk, in terms of expected return volatility, of a portfolio that contains structured products and other assets such as stocks and bonds.
Methodology Documents

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.
Methodology Documents

Morningstar ESG Commitment Level has supplemented our ratings work with a distinct, qualitative, analyst-driven evaluation of asset managers from an environmental, social, and governance perspective.
Methodology Documents

The Low Carbon Designation is an indicator that the companies held in a portfolio are in general alignment with the transition to a low-carbon economy.