Software & Data Services Money Management Solutions for Business All Products & Services Signature Research & Methodology The rationale that underpins our calculations and capabilities Morningstar Sustainability Rating for Funds Methodology Update - FAQ In 2021, Morningstar enhanced the current Morningstar Sustainability Rating methodology to cover not just corporate investments held by funds but also investments in countries, such as Sovereign Debt. Morningstar Research | July, 2021 Morningstar Sustainability Rating Methodology The Morningstar Sustainability Rating provides an objective way to evaluate how portfolios are meeting environmental, social, and corporate governance challenges, based on underlying security ESG Ratings from Sustainalytics. Morningstar Research | November, 2021 [Dutch] [French] Gender Diversity Metrics FAQ for Fund and Company Morningstar is introducing a new set of Fund and Company metrics that delve into the gender diversity breakdown of officers and boards of directors for public companies as well as funds. Morningstar Research | June, 2021 Morningstar Global Category™ Classifications The Morningstar Global Category™ assignments were introduced in 2010 to help investors search for similar investments domiciled across the globe. Morningstar supports global categories, which map into nine global broad category groups (Equity, Allocation, Convertibles, Alternative, Commodities, Fixed Income, Money Market, Property, and Miscellaneous). Morningstar Methodology | April, 2021 Gender Diversity Metrics Methodology for Fund and Company This Methodology paper introduces a new set of Fund and Company metrics that delve into the gender diversity breakdown of officers and boards of directors for public companies as well as funds. Morningstar Methodology | July, 2021 Morningstar Risk Ecosystem: An Integrated Client Risk Profiling and Portfolio Risk Scoring System The Morningstar Risk Ecosystem provides an evidence-based, transparent and independent set of methodologies to provide a more rigorous and manageable process for firms and advisors. This document is designed to provide a high-level overview with additional supporting Morningstar White Papers providing details on some of the specific components Morningstar Methodology | June, 2021 Financial Transaction Taxes This research paper analyzes the potential impact of a broad financial transaction tax on investors and reviews the successes and failures of implementing such taxes around the globe. Morningstar Research | June, 2021 ESG Risk Rating Assessment for Companies - Explainer Together as one company, Morningstar and Sustainalytics are introducing the ESG Risk Rating Assessment for companies to offer a way for the whole market to speak a common language about ESG risk—across all audiences, workflows, and investment vehicles. Morningstar Research | April 10, 2021 ESG Risk Rating Assessment for Companies - FAQs Together as one company, Morningstar and Sustainalytics are introducing the ESG Risk Rating Assessment for companies to offer a way for the whole market to speak a common language about ESG risk—across all audiences, workflows, and investment vehicles. Morningstar Research | April 10, 2021 Sustainalytics’ ESG Risk Ratings Methodology Sustainalytics’ ESG Risk Ratings Methodology provides insight into what the ESG Risk Ratings measure, the three building blocks of the ratings framework, the two rating dimensions (exposure and management), and how the ratings are calculated. The Morningstar ESG Risk Rating Assessment is based on Sustainalytics’ ESG Risk Ratings. Morningstar Methodology| Jan, 2021 Crowd Sense Signal for Funds - Methodology Crowd Sense helps investors gain a broader picture of investment popularity and places that popularity in the context of the underlying appeal of the investment. Morningstar Research | Dec, 2020 Global Investor Experience Methodology - Disclosure The Disclosure grades issued in the Global Investor Experience study were based on the answers to 30 questions in a fixed-response survey completed by in-house, country-expert analysts, plus other inputs determined quantitatively by leveraging Morningstar's comprehensive and extensive global database of managed products. Morningstar Research | Dec, 2020 The Morningstar ESG Commitment Level Our first assessment of 100-plus strategies and 40 asset managers Morningstar Research | Nov, 2020 Integrating ESG Into Morningstar Equity Research: FAQs Morningstar Research | Nov, 2020 Introducing the Morningstar Capital Allocation Rating: FAQs Morningstar Research | Nov, 2020 Morningstar Equity Research Methodology This document details the methodology behind the Morningstar Rating for stocks, which offers investors and advisors a tool to assess an equity's intrinsic value against its current market price. Morningstar Research | Nov, 2020 Morningstar Category Definitions - China The Morningstar Category classifications were introduced to help investors make meaningful comparisons between mutual funds. Morningstar regularly reviews the category structure and the portfolios within each category to ensure that the system meets the needs of investors. Morningstar Research | Apr, 2021 [Simplified Chinese] The Morningstar Capital Allocation Rating We are optimizing our previous stewardship rating to focus on balance sheet health, investment efficacy, shareholder distributions. Morningstar Research | Oct, 2020 Integrating ESG Into Morningstar's Equity Research In this methodology, analysts estimate the probability and materiality to a company's intrinsic value related to ESG risks and whether ESG-related risks could threaten the value creation capabilities of an otherwise competitively advantaged business. Morningstar Research | Oct, 2020 Morningstar Category for Funds Definitions - United States Morningstar Category for Funds Definitions for funds available for sale in the United States. Morningstar Methodology | Apr, 2021 ESG Commitment Level - Methodology The Morningstar ESG Commitment Level is a qualitative, analyst-driven evaluation of investment strategies and asset managers from an Environmental, Social and Governance (ESG) perspective. The Morningstar ESG Commitment Level is provided for investment strategies and associated vehicles and for the asset management firms that run them. Morningstar Research | Sep, 2020 Morningstar Analyst Rating for 529 Plans™ - Methodology Morningstar has conducted qualitative, analyst-driven research on 529 plans since 2004. Since July 2012, we have expressed this research through the Morningstar Analyst Rating for 529 College-Savings Plans accompanied by written analysis. An essential complement to our database of investment information and our suite of quantitative research tools, such as the Morningstar Rating® for 529 investment options, Morningstar's 529 plan analysis has always focused on helping individuals saving for education expenses make better investment decisions. The Analyst Rating and accompanying report: Morningstar Research | Jul, 2020 Morningstar Analyst Ratings for Funds Methodology The Analyst Rating reflects Morningstar analysts' forward-looking analysis of a fund, expressed on a five-tier scale with three positive ratings of Gold, Silver, and Bronze, a Neutral rating, and a Negative rating. Morningstar Fund Analysts | Feb 28, 2021 [Dutch] [French] Morningstar Quantitative Rating™ - Pillar Methodology The Quantitative Ratings are composed of the Morningstar Quantitative Rating™ for funds, Quantitative Parent Pillar, Quantitative People Pillar, and Quantitative Process Pillar. Morningstar Research | Jan, 2020 Morningstar Sustainable Attributes℠ - Framework and Definitions Over the course of the last year, we have assessed this global data set and received input on its usability and relevance from our own research teams, clients, and the market. As a result, we are introducing a change to the collection criteria for the ESG Incorporation data point. This data point is one of many Sustainability Attributes data points offered by Morningstar. Morningstar Research | Jan, 2020 Morningstar Sustainable Attributes℠ - FAQ As the industry has evolved, portfolio managers increasingly include environmental, social, and governance dimensions into their investment processes. Investors now seek tools to more easily identify managed investments committed to employing these different strategies to mitigate sustainability risk or to better align with their goals or values. Morningstar Research | Jan, 2020 Morningstar Fund Flow Model Methodology The Morningstar Quantitative Research team has been researching drivers of fund flows since the 2015 launch of the "What Factors Drive Investment Flows" paper. Subsequently, we conducted a body of work researching fund flows for new funds, how fund flows influence fund closures, and the effects of manager changes on fund flows. In total, the work analyzes fund flows during all phases of a fund's lifecycle: launch, operational, closure, and transitional periods. Morningstar is interested in the full lifecycle of fund flows because they represent the aggregate decisions investors make to their portfolios. Morningstar Quantitative Research | Sept 10, 2019 Morningstar After-Tax Return Methodology After-tax returns are measures of fund performance that take into account the taxes a hypothetical investor pays on fund distributions and capital gains. While a fund’s total return reflects the performance of the underlying securities, the after-tax return reflects the net gains or losses that an investor receives after paying taxes. Morningstar Research | March, 2019 Target-Date Fund Series Reports 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") are designed to help individual investors, financial advisors, consultants, plan sponsors, and other interested fiduciaries make informed decisions when selecting a series of target-date funds. Morningstar Manager Research | June 20, 2019 Morningstar Quantitative Equity & Credit Ratings - Methodology Morningstar has now developed a new way of combining our quantitative and analyst-driven output while expanding the coverage of our analysis beyond the capabilities of our analyst staff. Morningstar Quantitative Research | Sept 16, 2019 Morningstar Category Definitions - Europe, Asia and South Africa The Morningstar Categories for funds in the Europe/Asia/Africa universe were first established in the early years of the UCITS (Undertaking for Collective Investment in Transferable Securities) Directive to help investors make meaningful comparisons between Investment funds. Morningstar regularly reviews the category structure and the funds within each category to ensure that the system meets the needs of investors and keeps pace with market developments. Morningstar Research | Apr, 2021 Morningstar Category Definitions - Korea The Morningstar Category classifications were introduced to help investors make meaningful comparisons between mutual funds. Morningstar regularly reviews the category structure and the portfolios within each category to ensure that the system meets the needs of investors. Morningstar Research | Apr, 2021 Morningstar Category Definitions - Mexico The Morningstar Category classifications were introduced to help investors make meaningful comparisons between mutual funds. Morningstar regularly reviews the category structure and the portfolios within each category to ensure that the system meets the needs of investors. Morningstar Research | Oct, 2020 Morningstar Category Definitions - Japan The Morningstar Category classifications were introduced to help investors make meaningful comparisons between mutual funds. Morningstar regularly reviews the category structure and the portfolios within each category to ensure that the system meets the needs of investors. Morningstar Research | Apr, 2021 Morningstar Category Definitions - Thailand The Morningstar Category classifications were introduced to help investors make meaningful comparisons between mutual funds. Morningstar regularly reviews the category structure and the portfolios within each category to ensure that the system meets the needs of investors. Morningstar Research | Oct, 2020 Morningstar Sustainability Ratings Methodology Change FAQ In late 2019, Morningstar enhanced the current Morningstar Sustainability Rating methodology by replacing Sustainalytics' company ESG Rating with its ESG Risk Rating. We also introduced buffers between ratings increments to increase overall stability and establish rules for handling ratings of portfolios with extremely high overall ESG risk. Morningstar Sustainability Research | Jul 1, 2019 Morningstar Global Equity Classification Structure Portfolio diversification is generally thought of in terms of market capitalization and investment style, yet sector diversification is equally important. Pursuing a growth investment style via technology stocks leads to substantially different portfolios—and results—than pursuing growth via healthcare stocks. Morningstar Research | Nov 8, 2019 Morningstar Sustainability Pillar Scores In 2016, Morningstar released the Morningstar Sustainability Rating to help investors use environmental, social, and governance, or ESG, information to evaluate portfolios. The rating provides a reliable, objective way to evaluate how their portfolios are meeting ESG challenges. Morningstar Research | May 10, 2021 Morningstar Quantitative Risk Ranking Methodology Global wealth has increased dramatically over the past several decades, both in the aggregate and on a per capita basis. At the same time, capital markets have continued to broaden and deepen around the world, giving more people access to a wider selection of investment products in which to invest that wealth. Morningstar Quantitative Research Research | Nov 15, 2019 Morningstar Factor Profile Methodology A sizable literature exists identifying various “factors” that are believed to drive investment risk and return. Morningstar Style Box was an early adopter of factor identification, characterizing fund performance along two dimensions ­ size and value-growth. It has since become an invaluable tool for many investors in understanding fund and stock performance. Morningstar Quantitative Research Research | Nov 20, 2019 Morningstar Risk Model Risk is inherent to investing. Developing a prospective view of risk allows investors to make investment decisions tailored to their individual risk preferences and ultimately increase the utility derived from their investment portfolios. A risk model forecasts the distribution of future asset returns. This distribution contains all the information needed to assess the riskiness of a portfolio. Morningstar Research | Oct 1, 2019 Global Investor Experience 2019 The Global Investor Experience Fees and Expenses study grades are based on responses to six questions in a fixed-response survey completed by in-house, country-expert analysts, plus other inputs determined quantitatively by leveraging Morningstar’s comprehensive and extensive global database of managed products. Grant Kennaway | Sep 16, 2019 A Framework for Evaluating Model Portfolios This research paper provides a high-level overview of the model portfolio landscape and outlines our framework for assigning the forward-looking Morningstar Analyst Ratings to target-risk series of separate accounts that are representative of model portfolios. Jason Kephart | May 06, 2019 Fixed-Income Style Box Methodology The Morningstar Fixed-Income Style Box helps investors and financial professionals better understand the risks associated with a fund. It combines interest rate and credit risk in an intuitive visual to assist in portfolio construction and monitoring, leading to better investing outcomes. Morningstar Analysts | Oct. 31, 2016 The Morningstar Analyst Rating for Funds: Analyzing the Performance of the Analyst Rating Globally We analyzed the global performance of the Morningstar Analyst Rating for funds based on its ability to predict funds' future risk-adjusted returns. Taken as a whole, we find that Analyst Ratings effectively sorted funds based on their average future risk-adjusted returns. Jeffrey Ptak, James Li | Dec 11, 2017 Morningstar Equity Research Methodology This document details the methodology behind the Morningstar Rating for stocks, which offers investors and advisors a tool to assess an equity's intrinsic value against its current market price. Morningstar | Mar 15, 2017 Estimated Net Cash Flow Methodology Morningstar calculates estimated net cash flow for global open-end funds and ETFs, an estimate of the money put in or withdrawn by fund investors, accounting for reinvestment of distributions. Morningstar Analysts | Aug. 31, 2018 Morningstar Quantitative Rating for Funds Methodology To expand the number of funds we cover, the Morningstar Quantitative Rating™ for funds is created with a machine learning model that uses the decision-making processes of our analysts, their past ratings decisions, and the data used to support those decisions. Lee Davidson | Jul 12, 2018 Examining the Morningstar Quantitative Rating for Funds Read five event studies on the Morningstar Quantitative Rating in its first year of existence. By analyzing the ratings for all funds, we find insights into the Morningstar Category system, fund companies, and fund performance. Madison Sargis, Timothy Strauts | Aug 27, 2018 Morningstar Style Box Methodology The Morningstar Style Box™ was introduced in 1992 to help investors and advisors determine the investment style of a fund. It provides an intuitive visual representation of style that helps investors build better portfolios and monitor them more precisely. Morningstar | October 2020 Trending Research Get our latest in-depth analysis and differentiated industry coverage. Take Me There Transparency is our policy. Learn how it impacts everything we do. Read More Follow Morningstar © Copyright 2020 Morningstar, Inc. All rights reserved. Legal Notices Privacy Policy Regulatory Disclosures Global Contacts The Morningstar name and logo are registered marks of Morningstar, Inc. Opinions expressed are subject to change without notice. This commentary is for informational purposes only. Advisory and discretionary management services are provided by one or more Morningstar, Inc. subsidiaries, which are authorized in the appropriate jurisdiction to provide such services. For more details, click here. The information, data, analyses, and opinions presented herein do not constitute investment advice, are provided solely for informational purposes and therefore are not an offer to buy or sell a security. Morningstar has not considered any individual’s circumstances in preparing this information. Before making any investment decision, please consider consulting a financial or tax professional regarding your unique situation and consider the relevant disclosure document. 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