- Morningstar updates global methodology to increase usability and give investors a clearer view into how ratings are determined
- Morningstar will withdraw Medalist Ratings based on any algorithm-driven People, Process and Parent pillars in Australia from 31 March 2026 and will offer issuer initiated ratings in Australia and New Zealand from June 2026
SYDNEY – 5 December 2025 – Morningstar Australasia Pty Limited, a subsidiary of Morningstar, Inc. (Nasdaq: MORN), today announced significant updates to its Morningstar Medalist Rating™, its comprehensive forward-looking rating for managed investments. This includes an updated methodology, which will go live globally in April 2026, and is designed to simplify the rating structure, make the rating more transparent for investors, and enhance stability—empowering investors to more easily identify investments with the potential to outperform their Morningstar Category average.
“We’re giving investors greater visibility into our evaluation process and what drives our ratings. These changes deliver the clear, easy-to-interpret insights investors have been asking for,” said Matt Olsen, Director, Manager Research, Australasia.
Key Enhancements to the Global Medalist Rating Methodology
- Simplified Structure: Funds are evaluated against their Morningstar Category average rather than a benchmark, enabling investors to more easily identify Medalist options within a category and make meaningful peer comparisons.
- New Price Score: A Morningstar Medalist Rating Price Score from –2.5 to 2.5 will explicitly reflect whether an investment’s fee is a liability or competitive advantage, subtracting from or adding to the overall rating.
- Fixed Rating Thresholds: Medalist Ratings will be determined by a simple combination of fundamental pillar ratings (People, Process, Parent) and a Medalist Rating Price Score, increasing stability by eliminating a forced distribution of ratings that caused ratings to change based on updates to other funds.
The ratings scale will remain a five-tier system: Gold, Silver, Bronze, Neutral, and Negative.
Withdrawal of Medalist Ratings based on any algorithm-driven People, Process and Parent pillars in Australia
Additionally, from 31 March 2026, Medalist Ratings based on any algorithm-driven People, Process and Parent pillars will be withdrawn from Australia and all ratings in Australia will be produced qualitatively by Morningstar’s analysts. Morningstar expects the coverage breadth of qualitatively rated funds to expand in Australia.
"Client feedback and market analysis have made it clear that Australian investors and advisers most value the insights and qualitative expertise of Morningstar’s analysts,” said Olsen. “We remain committed to empowering investor success by providing meaningful insights."
Transition to Issuer Initiated Ratings in Australia and New Zealand
Starting from June 2026, Morningstar Australia will offer Issuer Initiated Ratings where fund managers or financial product issuers in Australia and New Zealand will pay a fee to Morningstar for the preparation of a Medalist Rating.
Consistent with the prevailing market practices for ratings in Australia, this business model is specific to Australia and New Zealand.
While Morningstar is changing its business model in Australia and New Zealand, the Medalist Ratings methodology continues to apply across all markets, ensuring all Medalist Ratings are based on the same robust analytical framework.
“Morningstar’s mission is to empower investor success. This model will allow us to continue to grow the capability and capacity of our team. By listening to our clients and evolving our business model, we’re ensuring our ratings are transparent, and aligned with the way investors and advisers make decisions,” said Peter Bryant, managing director, enterprise products, Australia.
About Morningstar Australasia Pty Limited and Morningstar, Inc.
Morningstar Australasia is a subsidiary of Morningstar, Inc. (“the company”), a leading provider of independent investment insights in North America, Europe, Australia, Asia, and Africa. The Company offers an extensive line of products and services for individual investors, financial advisors, asset managers and owners, retirement plan providers and sponsors, institutional investors in the debt and private capital markets, and alliances and redistributors. Morningstar provides data and research insights on a wide range of investment offerings, including managed investment products, publicly listed companies, private capital markets, debt securities, and real-time global market data. Morningstar also offers investment management services through its investment advisory subsidiaries, with approximately $369 billion in AUMA as of Sept. 30, 2025. The Company operates through wholly-owned subsidiaries in 32 countries. For more information, visit http://www.morningstar.com/company. Follow Morningstar on LinkedIn @Morningstar.
Morningstar’s Manager Research Group
Morningstar’s Manager Research Group consists of various wholly owned subsidiaries of Morningstar, Inc. including, but not limited to, Morningstar Research Services LLC. Morningstar Manager Research provides independent, fundamental analysis on managed investment strategies. Morningstar views are expressed in the form of Morningstar Medalist Ratings, which are derived through research of three key fundamental pillars—People, Process, and Parent, and a quantitative assessment of costs in the form of the Medalist Rating Price Score. The Morningstar Medalist Rating is the summary expression of Morningstar’s forward-looking analysis of investment strategies as offered via specific vehicles using a rating scale of Gold, Silver, Bronze, Neutral, and Negative. A global research team issues detailed research reports on strategies that span vehicle, asset class, and geography.
Medalist Ratings are not statements of fact, nor are they credit or risk ratings, and should not be used as the sole basis for investment decisions. A Medalist Rating is not intended to be nor is a guarantee of future performance. This press release is for informational purposes only; references to securities should not be considered an offer or solicitation to buy or sell the securities.
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Contact: Christine St Anne, +61 407 915 145, Christine.stanne@morningstar.com