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.

U.S. investors favored passive funds over active by a record margin in 2016.

Investing in the wide-moat stocks of today and tomorrow

A look at low volatility investing and interest rates

Quality recommendations for current income and income growth from stocks.

A rational approach to asset allocation.

Investing in the wide-moat stocks of today and tomorrow

Quality recommendations for current income and income growth from stocks.

Morningstar data point explanation.

A look through the best and worst of the year's new ETF offerings

A rational approach to asset allocation.

Investing in the wide-moat stocks of today and tomorrow

If you help your clients raise financially fit kids, everyone wins: Your clients get peace of mind that their children will be better equipped for life on their own, the children get a financial head start to prepare them for financial independence, and

A rational approach to asset allocation.

Quality recommendations for current income and income growth from stocks.

Helping your clients navigate personal relationships might not be your favorite talking point, but your willingness to tackle the issue head-on could be key for your business. Our paper, Financial Turning Points: Relationships, Marriage, and Divorce, exa

Russ Kinnel looks at which matters more in the long run, cost or shorter-term performance

A rational approach to asset allocation.

Investing in the wide-moat stocks of today and tomorrow

Research and recommendations for the serious fund investor.

Quality recommendations for current income and income growth from stocks.

Russ Kinnel looks at which matters more in the long run, cost or shorter-term performance

Investing in the wide-moat stocks of today and tomorrow

A rational approach to asset allocation.

A guide to the methodology underpinning the fixed income style box for Chilean funds.

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

A guide to the methodology underpinning the Morningstar Fixed Income style box.

Research and recommendations for the serious fund investor.

The calculation logic supporting our fee level for 529 Plans.

An explanation of the policy and calcuations for when an extended performance will be calculated for US funds.

Methodology outlining the calculations of fee level for US Insurance fund group

The paper describes how common quantitative Morningstar ranks are determined.

Calculation methodology explaining fee level calculation for open markets in Europe, Africa and Asia

The calculation logic for fee level scores applicable to Funds and VA subaccounts available to U.S. investors.

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

This project aims to classify asset types at the detailed level of paper holdings for fixed-income or debt-oriented schemes, as disclosed by asset-management companies in their holding data for such schemes.

Quality recommendations for current income and income growth from stocks.

Research and recommendations for the serious fund investor.

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

A rational approach to asset allocation.

Investing in the wide-moat stocks of today and tomorrow

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 ke

A commonly used measure of return volatility is the standard deviation of monthly returns multiplied by to express it in the same unit as annual return

An essential complement to our database of investment information and our suite of quantitative research tools, Morningstar's target-date series analysis focuses on helping fiduciaries make better investment decisions with plan participants' retirement f

Morningstar has a rich tradition of holdings-based analysis of mutual funds and other investment portfolios. The portfolio holdings provide insight into the manager’s strategy and help investors determine if an investment might be appropriate for them.