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 contains data and product information about Morningstar Australia Equity Research Coverage

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 bei

Morningstar indexes reveal lessons about the unpredictability of markets amid a painful year for both stocks and bonds.

A look at how higher bond yields, lower equity valuations, and inflation affect starting safe withdrawal rates,

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

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.

The number of climate-themed funds reaches new highs as investors seek more options to manage climate risks and leverage opportunities.

Thematic investing is embodiment of secular growth themes focused on capturing transformational macroeconomic, technological, and ecological trends that have tremendous capability to enhance portfolio outcomes.

This document serves to report on the performance of these factors for the third quarter of 2022. It focuses on returns (for the quarter to date) to measure factor performance.

COP27 will clarify the links between water risk and climate change. How are asset managers responding?

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

Morningstar dividend indexes demonstrate that the relationship between equity income and interest rates is dynamic.

Guide to using the Factor Awareness Dashboard.

Managers downgrade more Article 9 funds ahead of 2023 enhanced disclosure regime.

Flows fell further but held up better than the broader market.

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.

This paper explains an alternative utility-based dynamic asset allocation algorithm that does not require expected returns.

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

Top pension funds support sustainability more than fund managers.

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

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.

Morningstar Indexes' equity and bond benchmarks highlight volatility and its risks, a complex diversification picture, and attractive prices.

We aim to identify what aspects of personalization investors value and to what extent they valued different tailored solutions.

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 terminol

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

Comments on draft ISSB climate and sustainability standards highlight major challenges to achieving a ‘global baseline.’

The Morningstar Risk Model is a holdings-based model that helps identify and assess the risk in one's investments.