May 4, 2020

Morningstar Expands Morningstar Quantitative Rating to EMEA and Asia

Powered by a machine-learning model, the rating represents Morningstar's ongoing commitment to provide investors with a powerful toolkit to assess funds and help them reach their financial goals

LONDON/HONG KONG, 5th May 2020 -- Morningstar, Inc. (Nasdaq: MORN), a leading provider of independent investment research, today announced the expansion of its Morningstar Quantitative RatingTM (the Quantitative Rating) coverage in Europe, Middle East, and Africa (EMEA) and Asia. The rating uses a machine-learning model to rate 22 times more funds than are rated by Morningstar analysts in EMEA and Asia.

The Quantitative Rating is an extension of the recently enhanced Morningstar Analyst RatingTM for funds (Analyst Rating), which provides an analyst's forward-looking assessment of a fund's ability to outperform its peer group or a relevant benchmark on a risk-adjusted basis over a full market cycle. Morningstar EMEA and Asia manager research analysts assign Analyst Ratings to approximately 1,260 open-end and exchange-traded funds and together with the Quantitative Rating, cover approximately 29,200 funds, representing nearly 105,000 share classes in EMEA and Asia.

"Investors can use the Quantitative Rating, together with our other fund ratings, to improve their fund screening and selection process," said Wing Chan, Director, EMEA and Asia Manager Research Practices for Morningstar Investment Management Asia Limited. "The Quantitative Rating algorithmically extends the objective, rigorous analysis that our manager research analysts conduct to thousands of additional funds, providing investors with broader coverage than ever before with the independent perspective they have come to know and trust from Morningstar."

Using an approach rooted in artificial intelligence, Morningstar's machine-learning model incorporates the decision-making processes of manager research analysts, their past rating decisions, and the data used to support those decisions. The machine-learning model is then applied to funds not covered by Morningstar analysts. This process generates the Quantitative Rating, which is analogous to the rating a Morningstar analyst might assign if an analyst covered the fund. The scale for the Quantitative Rating is the same as the Analyst Rating: ratings are assigned on a five-tier scale with three positive ratings of Gold, Silver, and Bronze; a Neutral rating; and a Negative rating. Funds will either receive an Analyst Rating or a Quantitative Rating, but not both.

Effective 30 April 2020, the Quantitative Rating for funds in EMEA and Asia is available to Morningstar clients through our flagship software, Morningstar DirectTM, and our data feeds for Web Platforms serving Advisers, Fund Selectors, and Asset Management firms. The rating was initially introduced for funds in the United States in June 2017 with a limited release in Web-Based Morningstar Direct, followed by an expanded launch in March 2018.

Morningstar will host a webinar on Tuesday, 12 May at 15:30 (GMT), led by a panel of Morningstar research leaders, about the Quantitative Rating and what's behind the machine-learning technology used to generate the rating; register here for the webinar. The full Quantitative Rating methodology is available here. A shareable infographic about Morningstar's fund ratings and how they can be used by investors to assess funds is available here.

About Morningstar, Inc.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The Company offers an extensive line of products and services for individual investors, financial advisors, asset managers, retirement plan providers and sponsors, and institutional investors in the debt and private capital markets. 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 $179 billion in assets under advisement and management as of 31 March 2020. The Company has operations in 27 countries. For more information, visit Follow Morningstar on Twitter @MorningstarInc.

Morningstar's Manager Research Group consists of various wholly owned subsidiaries of Morningstar, Inc. including, but not limited to, Morningstar Research Services LLC. Morningstar's Manager Research Group produces various ratings including the Morningstar Analyst Rating for funds and the Morningstar Quantitative Rating for funds. The Analyst Rating is derived from a qualitative assessment process performed by a manager research analyst, whereas the Morningstar Quantitative Rating uses a machine-learning model based on the decision-making processes of Morningstar's analysts, their past ratings decisions, and the data used to support those decisions. In both cases, the Ratings are forward-looking assessments and include assumptions of future events, which may or may not occur or may differ significantly from what was assumed. The Analyst Ratings and Quantitative Ratings are statements of opinions, subject to change, are not to be considered as guarantees and should not be used as the sole basis for investment decisions. Analyst Ratings and Quantitative Ratings are not guarantees nor should they be viewed as an assessment of a fund's or the fund's underlying securities' creditworthiness. This press release is for informational purposes only; references to securities in this press release should not be considered an offer or solicitation to buy or sell the securities.

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