What is Morningstar and How to Use It to Invest?

Morningstar is a globally recognized tool for comparing financial products through evaluations and analytics, created in 1984, by Joe Masueto. Although it recently allows many things to be done, it is mainly used for what it was created: to analyze investment funds.

It offers a fund rating, where it classifies the thousands of investment funds existing in the world, granting them from 1 star to 5 stars. These ratings are evaluations that indicate risk and give a measure of solvency and the probability of a default on financial obligations.

In this fund rating, only 10% of existing investment funds obtain 5 stars, based on their past performance, commissions and product risk. In 2019, it already has more than 500,000 assets in its database, which has made it a reference for financial analysis.

What is Morningstar?

Morningstar is a leader in the independent financial investment research industry. It is the world’s largest provider of analytics for independent and institutional investors, asset managers, financial advisors, and retirement providers, among others.

It offers analytics on a wide investment offering including, listed companies, managed investment products, private capital markets, as well as real-time data. It also provides investment management services through its investment advisory subsidiaries.

Currently, with more than 200,000 million dollars in assets under advice and investment as of December 31, 2016. In addition, the company already operates in 27 countries and continues to grow, which allows it a very good global vision of the financial markets.

In Spain, where it operates directly, since 2001, it has its specialized website, where it gives access and provides information on the financial products available in the country.

In other words, the website gives access and specific information on the funds available to private investors. It also offers independent editorial content produced by the company’s analysts and journalists around the world.

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How to use it to invest?

It allows you to define a diversified portfolio, according to the diversification strategy that you have designed for your investments. Using the fund search tool, you will find the existing funds in the category of your interest. And select in that category the 5-star funds from the app’s rating.

The tool is so flexible that it allows you to search and filter the investment funds that may interest you. Apart from the analytical reports of the investment funds, it has a tool to create and monitor your personal portfolio.

It provides a detailed image of your global position, with a summary of the stocks and bonds existing in the investment funds you own. Likewise, you can have very complete information on each of the investment funds and tables of all the funds organized by the criteria you require.

In addition to its well-known rating, the company offers other investment tools:

Morningstar Style Box

This tool classifies investment offers based on volume and style.

Morningstar Ownership Zone

It is a graphical tool with the function of analyzing each share in the portfolio of an investment fund in the Style Box.

Morningstar Analyst Rating

It offers a predictive analysis of a fund, established in levels: Gold, Silver, Bronze, Neutral or Negative.

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