Research Library
Morningstar Quantitative Rating for Funds Methodology
By Lee Davidson | 26 June 2017
The number of funds that receive Morningstar Analyst Ratings is limited by the size of the Morningstar analyst team. To expand the number of funds we cover, we have developed a machine-learning model that uses the decision-making processes of our analysts, their past ratings decisions, and the data used to support those decisions. The machine-learning model is then applied to the "uncovered" fund universe and creates the Morningstar Quantitative Rating (Quantitative Rating), which is analogous to the rating a Morningstar analyst might assign to the fund if an analyst covered the fund. These quantitative ratings predictions make up what we call the Morningstar Quantitative Rating™ for funds. With this new quantitative approach, we are able to rate nearly 6 times more funds in the U.S. market.
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