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.

Methodology explaining the fee level calculation for Australia.

Morningstar category averages are designed to represent the average return of funds within their category over time. Morningstar creates a category average daily total return index series, or TRI, as well as monthly, quarterly, and annual averages of ret

This document details the methodology for the Morningstar Total Return Index, calculated at the fund level and representing the value over time of one share purchased and owned since inception, assuming all dividends and distributions are reinvested.

The calculation logic supporting our fee level for 529 Plans.

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

Morningstar Risk Model Performance Attribution Methodology

Far from experiencing a slowdown, taxable bond and international equity saw a lot of activity in July. The two Morningstar category groups attracted $34.7 billion and $23.0 billion, respectively. For both, the majority of these flows came from passive fu

Quality recommendations for current income and income growth from stocks.

Morningstar and Sustainalytics partner to analyze the pros and cons of nuclear power as an ESG investment.

Investing in the wide-moat stocks of today and tomorrow

Quality recommendations for current income and income growth from stocks.

Taxable Bond and International Equity Continue to Dominate Flows Investors continued to stream money into taxable-bond and international-equity funds in June. Unlike in previous months, the taxable-bond Morningstar category group saw higher inflows on th

Investing in the wide-moat stocks of today and tomorrow

After five encouraging months and a so-and-so April, the U.S. equity category group slid into outflow territory in May, with total redemptions of $3.1 billion. Taxable bond remained the overall leader with inflows of $36.9 billion, and international equi

The paper contains data and product information about Morningstar's Australian Investments Classification Policy Methodology

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

The paper contains data and product information about Morningstar Australia Total Shareholder Return Methodology for Listed Securities

The paper contains data and product information about Morningstar Australia After-tax Performance Calculation Methodology

The paper contains data and product information about Morningstar Manager Research Coverage in Australia & New Zealand

The paper contains data and product information about Morningstar Australia Standard Performance Calculation Methodology

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

The paper contains data and product information about Morningstar New Zealand Portfolio Investment Entity (PIE) Performance Calculation Methodology

Quality recommendations for current income and income growth from stocks.

The Morningstar Portfolio Product Involvement metrics measure a portfolio’s exposure to involvement in a range of products, services, and business activities. The metrics are holdings-based calculations that use company-level analytics from Sustainalytic

Investing in the wide-moat stocks of today and tomorrow

Investing in the wide-moat stocks of today and tomorrow

To provide fixed-income investors with meaningful information about the credit risk in managed investment portfolios, Morningstar calculates a holding-weighted measure of exposure measured by credit-rating categories called the Credit-Rating Breakdown.

For investment portfolios that hold meaningful levels of fixed-income holdings, Morningstar produces a number of calculated fixed-income analytic measures. Portfolio analytic measures are created by first calculating corresponding holding-level measures

Introduction to Morningstar fixed-income calculations.

Fixed-income analysis is inherently an exercise in the measurement of future cash flows. Payments of interest on principal invested constitute the primary means of return to fixed-income investors with the expectation that the principal will be repaid up

For managed investments such as mutual funds, Morningstar calculates average effective maturity. This measure is the holding-weighted average of the terms of the individual instruments within the portfolio. With this measure, investors can analyze exposu

Quality recommendations for current income and income growth from stocks.

The Global Risk Model helps you identify and assess the amount of risk in your investments.

After four months during which U.S. and international-equity funds attracted similar inflows, international equity took the lead in the equity space with a little over $21 billion in total flows. U.S. equity's winning streak seems to have waned, as the c

A rational approach to asset allocation.

Quality recommendations for current income and income growth from stocks.

Morningstar Category classifications sorts portfolios into peer groups based on their holdings. The categories help investors identify the top performing funds, assess potential risk, and build well-diversified portfolios. Here is how those categories ar

Morningstar Europe, Asia and South Africa Category definitions for managed investment portfolios