Overview

Morningstar's coverage universe is expanding. We've shared that from September, the Morningstar Medalist Ratings can be powered by an analyst, a machine-learning algorithm, or a combination of both. Our approach to analyst coverage is also evolving. We believe some strategies can be covered more dynamically to enable analysts to spend more time where warranted.

How Morningstar Makes Analyst Coverage Decisions

Morningstar follows several principles in determining which vehicles will be covered by analysts. We consider factors including investment merit, investor interest, and client demand. Morningstar seeks to ensure that users of its research have access to analysis on a broad spectrum of vehicles that are important to them and meet their needs for portfolio construction. Given we do not charge asset managers to rate their strategies, we allocate analyst resourcing where we believe it will have the most impact for investors.

Manager Research Analyst Review Schedule

Analysts typically review strategies under coverage annually or as often as material changes warrant. This review includes data analysis, an interview with the investment team, completion of a ratings note, vetting and approval of the proposed ratings by the Morningstar Ratings Committee, and publication of an updated Morningstar Investment Report and Medalist Rating.

A Dynamic Approach

Starting in the third quarter of 2023, a selection of the strategies covered by analysts will move to dynamic coverage and will be reviewed using the process described above every two years. Every other year, the analyst will gather appropriate data and complete a checklist to confirm there were no material changes to the team, process, portfolio, or performance. Strategies that pass this checklist review process will receive reaffirmed People and Process pillar scores from the Ratings Committee, extending the validity of the published Managed Investment Reports until the next full review. Strategies that do not pass this review will move to a full review, and Ratings Committee members may request a full review if conditions warrant. Analysts will regularly monitor data for all strategies under coverage that might trigger a full review before expected deadlines, including but not limited to manager or team changes, significant process, portfolio, or performance changes, flows, or other developments. The Morningstar Manager Research Coverage Committee will revisit the dynamic coverage list on a quarterly basis and make updates as conditions warrant. Asset managers will be notified in the normal course of the review cycle.