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Morningstar, Inc.
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=== Offerings === Its independence and its history of innovation make it a trusted resource for investors. Morningstar’s research covers a wide range of investment offerings, including managed investment products, publicly listed companies, private companies, fixed-income securities, and real-time global market data. It focuses its data and research efforts on several areas: '''''Manager research (including mutual funds, exchange-traded funds, separately-managed accounts, and other vehicles)''''' Morningstar has been providing independent analyst research on managed investment strategies since the mid-1980s. It uses this analysis to provide research reports and qualitative, forward-looking Morningstar Analyst Ratings for approximately 4,900 mutual funds, ETFs, separately managed accounts, and collective investment trusts (CITs) globally spanning more than 24,000 share classes. It also offers the Morningstar Quantitative Rating, which is a forward-looking rating that uses algorithmic techniques to evaluate mutual funds that significantly expands the breadth of its forward-looking ratings to an additional 50,000 funds and over 370,000 share classes worldwide. The Morningstar Quantitative Rating employs machine learning to infer patterns from the way Morningstar’s manager research analysts assign ratings to funds and then applies those learnings to rate funds that the analysts don’t cover. This analysis augments other quantitative ratings and analytics, such as the Morningstar Rating for funds (the “star rating”), which ranks managed investment strategies such as mutual funds based on their past risk-adjusted performance versus peers. It also publishes qualitative research and ratings on state-sponsored college-savings plans, target-date funds, and health-savings accounts. In addition, the Morningstar Style Box visually depicts a strategy’s underlying investment style, making it easier to compare investments and build portfolios. The star rating and style box have become important tools that millions of investors and advisors use in making investment decisions. It also offers the Morningstar Sustainability Rating and Low Carbon Risk Designation to help investors evaluate funds based on ESG factors. As of December 31, 2021, Morningstar had more than 125 manager research analysts globally, including teams in North America, Europe, Australia, and Asia. '''''Equity research''''' As part of its research efforts on individual stocks, Morningstar popularized the concepts of economic moat, a measure of competitive advantage originally developed by Warren Buffett, and margin of safety, which reflects the size of the discount in a stock's price relative to its estimated value. The Morningstar Rating for stocks is based on the stock's current price relative to our analyst-generated fair value estimates, as well as the company's level of business risk and economic moat. Its analysts cover approximately 1,500 companies using a consistent, proprietary methodology that focuses on fundamental analysis, competitive advantage assessment, and intrinsic value estimation. Morningstar’s data and research on publicly traded companies is used extensively in its offerings, such as institutional equity research, Morningstar Indexes such as the Morningstar Wide Moat Focus Index, its Global Market Barometer, and as a basis for equity portfolio strategies used in Morningstar Managed Portfolios. Morningstar adheres to a globally consistent framework that integrates ESG risk into its equity research. Analysts identify valuation-relevant risks for each company using Sustainalytics' ESG Risk Ratings, which measure a company's exposure to material ESG risks, and then evaluate the probability that those risks materialize and the associated valuation impact. Results from this research inform Morningstar's assessment of a stock's intrinsic value and the margin of safety required before assigning a Morningstar Rating for stocks. PitchBook’s Institutional Research Group is a provider of investment strategy, fund performance and industry research. The group leverages PitchBook’s proprietary data, such as valuations, deal multiples, and fund returns, to deliver analysis that allows clients to quickly gauge trends, map industries, and identify notable company sets in the private capital markets. As of December 31, 2021, the team provides coverage of the private equity, venture capital, real assets and private credit asset classes. PitchBook also provides full-time analyst coverage of emerging technology industries, delivering comprehensive assessments of disruptive sectors to help clients better segment and size markets, understand company and investor landscapes, evaluate opportunities and develop conviction around the growth trajectories of emerging industries. As of December 31, 2021, Morningstar had over 130 public equity analysts and over 30 private markets analysts globally, making the company one of the largest providers of independent equity research. In addition to its analyst-driven coverage, Morningstar provides quantitative ratings and reports for approximately 57,000 publicly traded companies across Morningstar's offerings and cover 3.3 million privately-held companies through the PitchBook Platform. '''''Credit ratings''''' DBRS Morningstar provides global credit ratings as the world’s fourth largest credit rating agency. The company rates more than 3,000 issuers and 60,000 securities worldwide, providing independent credit ratings for financial institutions, corporate and sovereign entities, and structured finance products and instruments. Its goal is to bring more clarity, diversity, and responsiveness to the ratings process. Its approach and size provide the agility to respond to customers’ needs with the necessary expertise and resources. In addition to ratings and research opinions, DBRS Morningstar also offers data derived from its ratings activities and analytical tools. These include ratings data feeds that can be integrated into companies’ internal databases, web-based research, and analytical tools. It also offers DBRS Viewpoint, which is an interactive platform that provides access to commercial mortgage-backed securities (CMBS) transaction information and research reports, as well as commentary and work-product for DBRS Morningstar rated deals. As of December 31, 2021, the company had 480 credit rating analysts and analytical support staff based in the United States (U.S.)., Canada, the United Kingdom, Europe, and India. '''''ESG ratings''''' Sustainalytics’ ESG Risk Ratings empower investors with a consistent approach to assessing financially material ESG risks that could affect the long-term performance of their investments at the security, fund, and portfolio levels. Built on a transparent rules-based methodology, the ratings introduce a single measurement unit to assess ESG risks across material ESG topics. Unlike other ESG ratings that are based on a relative, best-in-class approach, Sustainalytics’ ESG Risk Ratings consist of ESG data that provides a powerful signal of a company’s absolute ESG risk that is comparable across peers and sub-industries while allowing for aggregation at the portfolio level. As of December 31, 2021, the company rated more than 20,000 companies worldwide, and offered more than 14,000 ESG Risk Ratings free to the public so that any investor can benefit from its research. As of December 31, 2021, the company had more than 500 ESG ratings analysts based in the U.S., Canada, Europe, and Asia. '''''Portfolio advice methodologies''''' Since the beginning, Morningstar has provided individual investors with tools to monitor their own investments, such as the Ownership Zone, Sector Delta, and Portfolio X-Ray. These do-it-yourself applications allow investors to see how different investments work together to form a portfolio and to track its progress. Morningstar also continues to improve its total wealth approach to investing and asset allocation capabilities, which are mainly used in the investment management products it offer to professional investors. Morningstar also looks for ways to infuse these capabilities into decision support tools. Whereas traditional asset allocation methodologies focus solely on financial assets (such as stocks and bonds), Morningstar's investment management group has developed methodologies that provide a more holistic view of all sources of wealth, including financial capital, human capital, housing assets, and retirement and pension benefits. Its investment management group offers in-depth advice on asset allocation, portfolio construction, and security selection to meet the needs of investors and professionals looking for integrated portfolio solutions. It's also published research on "gamma," an innovative measure that quantifies how much additional retirement income investors can generate by making better financial planning decisions.
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