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.

Our second assessment of 140 strategies and 31 asset managers.

President Joe Biden has unveiled a $2 trillion infrastructure plan that he plans to pay for largely with increases in corporate taxes. We believe the Democrats are highly committed to passing the plan, and both procedural and political reasons dictate th

China led the global economic recovery in the second half of 2020 (with GDP catching up to its prepandemic trend), growth decelerated in the first quarter of 2021, based on official GDP figures. Real GDP growth posted at just 2.4% (annualized) quarter ov

Methodology paper for Malaysia market

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

This methodology is applied to HK MPF Funds.

Australian category 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 f

In this paper, we build on our previous research to examine the range of possible outcomes if the contributions are invested in riskier assets during those 18 years in which money contributed to the account cannot be withdrawn.

The Globe Rating for companies is a visual representation of the Sustainalytics ESG Risk Classification that will allow investors to easily identify securities with low ESG risk.

The Morningstar Globe Rating for companies is a visual representation of the Sustainalytics ESG Risk Classification that will allow investors to easily identify securities with low ESG risk.

For funds available for sale in the United States.

Europe leads the world in ESG practices, along with Hong Kong and Taiwan. The United States scores well on Carbon Metrics.

Morningstar Risk Decomposition Methodology

Applying Sustainalytics-driven carbon metrics to Morningstar’s suite of equity indexes can guide investors seeking to reduce carbon exposure.

In this paper, we dig into the diversification benefits of adding various assets to a U.S. equity portfolio. We take a deep dive into how different asset classes performed in 2020, how correlations between them have changed, and what those changes mean f

In May 2021, Morningstar will introduce several data points that will make it easier for investors to use the pillar scores.

In the biggest year for dividend cuts since 2008-09, high-quality, financially healthy companies were likelier to maintain payouts.

In this updated and expanded report, we build upon our original examination of synthetic exchange-traded funds in Europe, describing how the split between physical and synthetic ETFs in Europe has evolved in the past decade, citing the causes for the fal

This paper explores how gender representation has varied among defined-contribution plan administrators from 2000 to 2017 and the relationship between gender and plan quality.

The U.S. economic recovery paused at the end of 2020, as a third wave of the coronavirus pandemic caused a retreat from the return to normal activity. This is no indication that the recovery is finishing up for good, however. An end to the pandemic in t

This report aims to support investors interested in gauging environmental, social and governance risks and opportunities in the global food value chain. This is the seventh edition of Sustainalytics’ "10 for" series--an annual publication that focuses on

How a social signal can help investors steer away from low-quality investments.

China's economy has entirely recovered from the pandemic, with growth now running ahead of its prepandemic rate. However, we expect growth to slow in the coming years as China pivots away from countercyclical support and back to rebalancing its economy.

Our study aims to better understand which rules people think are important, what rules they use, and how rules are correlated with a well-established measure of financial well-being.