What is Morningstar?

Jeremy BiberdorfBy: Jeremy Biberdorf

April 19, 2023April 19, 2023

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As an investor, you’re constantly seeking reliable sources of information to help you make informed decisions. Enter Morningstar, a leading provider of investment research and tools that has been empowering individuals and institutions since its founding in 1984 by Joe Mansueto.

With comprehensive analysis and insights on mutual funds, exchange-traded funds (ETFs), stocks, and other investment assets, Morningstar has become a trusted resource for investors across the globe. In this article, we’ll explore the key features and offerings of Morningstar that make it an invaluable resource for you and your investment journey.

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Company Background: The Story Behind Morningstar

Morningstar was established with the goal of providing unbiased, independent research and tools for individual and professional investors. Since its inception, the company has grown significantly, diversifying its product and service offerings and extending its reach to a global audience. With assets under management (AUM) exceeding $245 billion, Morningstar has become an industry leader, setting the standard for investment research and analysis.

Morningstar’s commitment to transparency, innovation, and independent analysis has earned it widespread recognition and trust, making it an indispensable resource for investors looking to make well-informed investment decisions.

Morningstar: A Comprehensive Investment Research Platform

Morningstar is a leading investment research platform that caters to a wide range of clients, from professionals to individual investors. To better serve their diverse customer base, Morningstar breaks up their services into three main categories: Professional Products, Managed Investment Products, and Individual Investor Products.

Individual Investor Products

Morningstar’s Individual Investor Products are designed to provide independent advice and insights to help self-directed investors at every stage of their investment journey. Some of the key offerings in this category include:

  • Morningstar Investor ($34.95/Month or $249 Annually): This comprehensive platform helps individual investors strengthen their investment strategy with access to independent research and powerful tools. With a Morningstar Investor subscription, users can access detailed analysis on stocks, mutual funds, and exchange-traded funds (ETFs), as well as tools for portfolio tracking and optimization.
  • Morningstar Investor Newsletters: These newsletters offer investment strategies and in-depth analysis delivered in print or digitally to individual investors. Topics covered in these newsletters range from specific investment ideas and market trends to long-term investing strategies and personal finance.

While we’ve highlighted the Individual Investor Products, it’s worth noting that Morningstar also offers a wide range of Professional Products and Managed Investment Products for professionals and institutions. These services cater to the needs of financial advisors, asset managers, and other professionals, offering advanced portfolio analytics, performance reporting, investment management, and indexing services.

Investment Analysis and Offerings

Morningstar’s research platform covers various investment assets, such as mutual funds, bond funds, ETFs, and individual stocks. Investors can access a list of funds and fund managers, along with in-depth research on their performance, risk profiles, and key variables that may impact their success.

The star rating system is a popular feature of Morningstar, providing a straightforward assessment of a fund’s risk-adjusted historical performance over a specific time period. This enables investors to compare funds within the same asset class and make better-informed decisions based on the fund’s ability to generate positive returns while managing risk.

Portfolio Management Tools and Portfolio X-Ray

Morningstar offers portfolio management tools such as Portfolio X-Ray, which enables users to gain insight into their actual portfolio by analyzing the underlying holdings of their mutual funds, ETFs, and individual stocks. This feature helps investors understand their asset allocation, risk tolerance, and investment performance, allowing them to make strategic adjustments to optimize their portfolios.

Signing Up for Morningstar’s 7-Day Trial

Investors interested in trying Morningstar Investor can sign up for a 7-day free trial by providing their email address and payment information. The trial allows users to explore the platform’s offerings, including its research, analysis, and portfolio management tools, before deciding whether to commit to an annual plan or a multi-year subscription. After the trial period, users can choose the subscription that best suits their needs and investment goals.

Bright Spots: Key Features of Morningstar

  • Independent Analysis: Morningstar’s team of independent analysts provides unbiased, comprehensive research on a wide range of investment assets, helping investors make informed decisions based on data-driven insights.
  • Star Rating System: The star rating system offers a simple and effective way for investors to compare funds within the same asset class, taking into account the fund’s risk-adjusted historical performance.
  • Portfolio X-Ray: This feature allows users to delve deeper into their actual portfolio, examining the underlying holdings of their investment assets and providing valuable information on asset allocation, risk tolerance, and investment performance.
  • 7-Day Free Trial: Morningstar offers a seven-day free trial for its Premium service, allowing users to explore the platform and its offerings before committing to an annual plan or multi-year subscription.
  • Mobile App: Morningstar provides a mobile application that is available for both iOS and Android devices. The Android edition is referred to as “Morningstar Portfolio Manager” on the Play store, while the iOS version can be found as “Morningstar For Investors” on the App Store.

¬†Morningstar’s Sustainability Rating

As more investors become interested in incorporating environmental, social, and governance (ESG) factors into their investment decisions, Morningstar has introduced a Sustainability Rating to help users evaluate funds based on their ESG performance. This rating is designed to complement the traditional star rating system and provide investors with an additional layer of information to make well-informed investment choices.

How the Sustainability Rating Works

The Morningstar Sustainability Rating is based on the ESG scores provided by Sustainalytics, a leading global provider of ESG research and ratings. The rating assesses the ESG performance of a fund’s underlying holdings relative to its peer group. It is a numerical score ranging from 1 (low) to 100 (high), with a higher score indicating better ESG performance.

Keep in mind that the Sustainability Rating is not meant to replace the traditional star rating system, but rather to complement it by providing an additional layer of information. When evaluating investment options, consider both the star rating (which assesses a fund’s risk-adjusted historical performance) and the Sustainability Rating (which evaluates the fund’s ESG performance) to gain a comprehensive understanding of a fund’s overall performance and potential risks.

Final Thoughts: What is Morningstar?

Morningstar has established itself as a leading provider of investment research and tools, offering valuable insights and resources to help investors make informed decisions. With its comprehensive coverage of mutual funds, ETFs, individual stocks, and other investment assets, Morningstar is an indispensable resource for investors seeking in-depth analysis and independent guidance.

Whether you’re a long-term investor focused on fundamental analysis or a portfolio manager seeking advanced portfolio management tools, Morningstar’s diverse range of services caters to a wide variety of investor needs. By taking advantage of the platform’s 7-day free trial, you can explore the offerings and decide if Morningstar is the right fit for your investment journey.

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Jeremy Biberdorf
Jeremy Biberdorf

About the Author:

Jeremy Biberdorf is the founder of Modest Money. He's a father of 2 beautiful girls, a dog owner, a long-time online entrepreneur and an investing enthusiast.

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