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.

Morningstar Sustainability Pillar Scores

Morningstar Category Flow Model

We recently enhanced the methodology that underpins the Analyst Rating to make the ratings even more effective and useful to investors.

Morningstar is making revisions on the industry group and industry level in response to market and technology changes. The revised system calibrates the classifications to align more closely with industry standards, clarifies industry definitions, and be

Morningstar enhances the current Morningstar Sustainability Rating methodology by replacing Sustainalytics' company ESG Rating with its ESG Risk Rating.

Morningstar is enhancing the current Morningstar Sustainability Rating methodology by replacing Sustainalytics' company ESG Rating with its ESG Risk Rating.

Even with higher U.S. tariffs, overall foreign trade hasn't been a headwind to China's economy, despite substantial investor focus on the topic. Nevertheless, China's growth slowdown resumed in the third quarter, thanks especially to a collapse in consum

The Iberian Peninsula leads Environmental Scores, while the US lags but shows low Carbon Risk.

We recently announced our plans to update the methodology we follow in assigning Morningstar Analyst Ratings to mutual funds, exchange-traded funds, and other managed investments we cover. Here we examine the aggregate impact the methodology change would

China's economy remains in the doldrums. On the one hand, growth bumped up slightly in the second quarter, according to our broad proxy (despite officially reported growth being down), likely spurred by the rebound in credit growth in the first quarter.

A company’s Business Country is a vital data point and is used throughout Morningstar’s products and methodology.

Target-date funds are designed to be a simple, all-in-one solution that is relatively easy for investors to use. However, these simplifying features can make target-date funds tricky to evaluate. Morningstar Target-Date Fund Series Reports ("the Reports"

The ability to model the risk of a portfolio is paramount to making investment decisions that maximize utility. Our fundamental factor-based methodology provides a way to forecast risk, but, more important, it provides an intuitive interpretation of the