Morningstar, Inc. is an American

financial services Financial services are service (economics), economic services tied to finance provided by financial institutions. Financial services encompass a broad range of tertiary sector of the economy, service sector activities, especially as concerns finan ...

firm headquartered in

Chicago Chicago is the List of municipalities in Illinois, most populous city in the U.S. state of Illinois and in the Midwestern United States. With a population of 2,746,388, as of the 2020 United States census, 2020 census, it is the List of Unite ...

, Illinois, founded by Joe Mansueto in 1984. It provides an array of investment research and

investment management Investment management (sometimes referred to more generally as financial asset management) is the professional asset management of various Security (finance), securities, including shareholdings, Bond (finance), bonds, and other assets, such as r ...

services. With operations in 29 countries, Morningstar's research and recommendations are considered by financial journalists as influential in the

asset management Asset management is a systematic approach to the governance and realization of all value for which a group or entity is responsible. It may apply both to tangible assets (physical objects such as complex process or manufacturing plants, infrastr ...

industry, and a positive or negative recommendation from Morningstar analysts can drive money into or away from any given fund. Through its asset management division, the firm currently manages over . The firm also provides software and data platforms for investment professionals, including "Morningstar Research Portal", "Morningstar Direct" and "Morningstar Advisor Workstation".

History

Founder Joe Mansueto initially had the idea for Morningstar in 1982 while reviewing

mutual fund A mutual fund is an investment fund that pools money from many investors to purchase Security (finance), securities. The term is typically used in the United States, Canada, and India, while similar structures across the globe include the SICAV in ...

annual reports he had requested from several prominent fund managers. However, it was only after a year working as a stock analyst for Harris Associates, seeing the fund industry and potential competitors up close, that he was convinced that the opportunity was there. Morningstar was subsequently founded in 1984 from his one-bedroom Chicago apartment with an initial investment of US$80,000. The name ''Morningstar'' is taken from the last sentence in ''

Walden ''Walden'' (; first published as ''Walden; or, Life in the Woods'') is an 1854 book by American transcendentalism, transcendentalist writer Henry David Thoreau. The text is a reflection upon the author's simple living in natural surroundings. T ...

'', a book by

Henry David Thoreau Henry David Thoreau (born David Henry Thoreau; July 12, 1817May 6, 1862) was an American naturalist, essayist, poet, and philosopher. A leading Transcendentalism, transcendentalist, he is best known for his book ''Walden'', a reflection upon sim ...

; "the sun is but a morning star". In July 1999, Morningstar accepted an investment of US$91 million from

SoftBank is a Japanese multinational Investment company, investment holding company headquartered in Minato, Tokyo, that focuses on investment management. The group primarily invests in companies operating in technology that offer goods and services ...

in return for a 20 percent stake in the company. The two companies had formed a joint venture in Japan the previous year. Morningstar's

initial public offering An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investm ...

occurred on May 3, 2005, with 7,612,500 shares at $18.50 each. Morningstar went public by following in

Google Google LLC (, ) is an American multinational corporation and technology company focusing on online advertising, search engine technology, cloud computing, computer software, quantum computing, e-commerce, consumer electronics, and artificial ...

's footsteps and using the

OpenIPO OpenIPO is a modified Dutch auction which allows shares of an initial public offering (IPO) to be allocated impartially. It is a variation on the traditional way that shares are sold during the IPO process and results in all successful bidders pay ...

method, rather than the traditional method. This allowed individual investors to bid on the price of the stock via equal access. In 2006, Morningstar acquired Ibbotson Associates, Inc., an investment research firm. In 2007, Morningstar acquired the mutual fund data business of

S&P Global S&P Global Inc. (prior to 2016, McGraw Hill Financial, Inc., and prior to 2013, The McGraw–Hill Companies, Inc.) is an American publicly traded corporation headquartered in Manhattan, New York City. Its primary areas of business are financia ...

. In 2010, Morningstar acquired credit rating agency Realpoint for $52 million and began offering structured credit ratings and research to institutional investors. In the same year, Morningstar acquired Old Broad Street Research Ltd. (OBSR), a UK-based provider of fund research, ratings and investment advisory services, for $18.3 million. After the acquisition, the company was renamed as Morningstar OBSR. In 2014, Morningstar acquired ByAllAccounts, Inc., a provider of data aggregation technology for financial applications. In 2016, Morningstar acquired remaining ownership of PitchBook Data for approximately $225 million. In September 2016, Morningstar announced that it had appointed Kunal Kapoor as chief executive officer, effective January 2017, with Mansueto becoming executive chairman at the same time. In 2019, Morningstar acquired the world's fourth largest credit rating agency

DBRS Morningstar DBRS is a global credit rating agency with offices in Toronto, New York, Chicago, London, Frankfurt and Madrid. Morningstar DBRS provides independent credit rating services for financial institutions, corporate and sovereign entitie ...

for $669 million. After the acquisition,

merged with Morningstar’s credit rating business. In 2020, Morningstar entered into an agreement to acquire

Sustainalytics Sustainalytics is a company that rates the sustainability of listed companies based on their environmental, social and corporate governance (ESG) performance. The company was born of a merger between Toronto-based Jantzi Research, which was found ...

, a research and ratings firm specializing in environmental, social, and governance (ESG) insights. That same year, Morningstar agreed to acquire PlanPlus Global, a Canada-based financial planning and risk assessment software company. In 2021, Morningstar announced it would acquire the UK and international (including Jersey, Hong Kong and Dubai) operations of the Australian wealth management platform Praemium (ASX: PPS) for £35 million. In 2022, Morningstar announced that it will acquire the

-owned Leveraged Commentary & Data (LCD), a company specializing in

leveraged loan In finance, leverage, also known as gearing, is any technique involving borrowing funds to buy an investment. Financial leverage is named after a lever in physics, which amplifies a small input force into a greater output force. Financial leverag ...

market data, for about $650 million.

Products and services

Morningstar offers a wide array of products and services to both retail and institutional investors.

Morningstar Investment Management

Through its

subsidiary, Morningstar currently has over US$265 billion in assets under advisement and management.

Morningstar Direct

Morningstar Direct is a software platform that provides data and analytics to help professional investment managers craft new products and portfolios.

Morningstar Office Cloud

Morningstar offers a single end-to-end cloud-based platform for investment advisors, known as Morningstar Office Cloud. The software allows financial advisors to manage their practice, gain access to data and research, analyze investments, and connect with investors.

Morningstar Premium

The firm offers retail and individual investors with access to news, research, and stock, bond, and mutual fund analysis through its 'Morningstar Premium' subscription product.

Credit Ratings (NRSRO)

In 2010, Morningstar acquired Realpoint, LLC, a former division of private-equity giant Capmark Finance and a one-time nationally recognized statistical rating organization (

NRSRO A nationally recognized statistical rating organization (NRSRO) is a credit rating agency (CRA) approved by the U.S. Securities and Exchange Commission (SEC) to provide information that financial firms must rely on for certain regulatory purp ...

). The firm was rebranded as ''Morningstar Credit Ratings'' and competed with

s such as S&P,

Moody's Investors Service Moody's Ratings, previously and still legally known as Moody's Investors Service and often referred to as Moody's, is the bond credit rating business of Moody's Corporation, representing the company's traditional line of business and its histo ...

, and

Fitch Ratings Fitch Ratings Inc. is an American credit rating agency. It is one of the three nationally recognized statistical rating organizations (NRSRO) designated by the U.S. Securities and Exchange Commission and is considered as being one of the " Bi ...

. In 2019, Morningstar acquired NRSRO

for $669 million.

Morningstar Research Portal

In 2022, Morningstar launched its newest research platform aimed at helping financial advisors utilize Morningstar's investment research and other tools to identify and select investments, monitor investment performance, and inform how they communicate with clients.

Influence and criticisms

Morningstar is considered powerful in the investment management industry, and the firm's ratings and recommendations often influence a fund's assets under management. The firm's "star" ratings are often used by fund managers in marketing materials, and positive star ratings bring a credibility to a fund's strategy. Morningstar's analysts and data are frequently quoted in outlets such as the ''

New York Times ''The New York Times'' (''NYT'') is an American daily newspaper based in New York City. ''The New York Times'' covers domestic, national, and international news, and publishes opinion pieces, investigative reports, and reviews. As one of ...

'', ''

Wall Street Journal ''The Wall Street Journal'' (''WSJ''), also referred to simply as the ''Journal,'' is an American newspaper based in New York City. The newspaper provides extensive coverage of news, especially business and finance. It operates on a subscriptio ...

'', and ''

Financial Times The ''Financial Times'' (''FT'') is a British daily newspaper printed in broadsheet and also published digitally that focuses on business and economic Current affairs (news format), current affairs. Based in London, the paper is owned by a Jap ...

''. In October 2017, the ''Wall Street Journal'' published a front-page feature story criticizing Morningstar's influence and questioned the predictive power of the firm's rating system. In response, Morningstar provided a quantitative analysis showing that higher-rated funds outperform lower-rated funds, but cautioned against using the ratings as a definitive marker of future performance.

Corporate identity

Morningstar's current logo was designed by graphic designer

Paul Rand Paul Rand (born Peretz Rosenbaum; August 15, 1914 – November 26, 1996) was an American art director and graphic designer. He was best known for his corporate logo designs, including the logos for IBM, United Parcel Service, UPS, Enron, Morni ...

. The design features the "o" in Morningstar appearing as a rising sun, which is a nod to a

quote that inspired the company's name. Mansueto considers the logo "one of our most valuable assets".

Major offices

The firm is headquartered in

, Illinois, with major regional offices in

New York City New York, often called New York City (NYC), is the most populous city in the United States, located at the southern tip of New York State on one of the world's largest natural harbors. The city comprises five boroughs, each coextensive w ...

London London is the Capital city, capital and List of urban areas in the United Kingdom, largest city of both England and the United Kingdom, with a population of in . London metropolitan area, Its wider metropolitan area is the largest in Wester ...

Paris Paris () is the Capital city, capital and List of communes in France with over 20,000 inhabitants, largest city of France. With an estimated population of 2,048,472 residents in January 2025 in an area of more than , Paris is the List of ci ...

Sydney Sydney is the capital city of the States and territories of Australia, state of New South Wales and the List of cities in Australia by population, most populous city in Australia. Located on Australia's east coast, the metropolis surrounds Syd ...

Hong Kong Hong Kong)., Legally Hong Kong, China in international treaties and organizations. is a special administrative region of China. With 7.5 million residents in a territory, Hong Kong is the fourth most densely populated region in the wor ...

Shenzhen Shenzhen is a prefecture-level city in the province of Guangdong, China. A Special economic zones of China, special economic zone, it is located on the east bank of the Pearl River (China), Pearl River estuary on the central coast of Guangdong ...

, Mumbai and other cities around the world.

References

External links

*
Investor RelationsUnderstanding the Star Rating and Fund Analyst Picks
(from morningstar.com) {{Authority control 1984 establishments in Illinois 2005 initial public offerings American companies established in 1984 Companies based in Chicago Companies listed on the Nasdaq Credit rating agencies Financial data vendors Financial services companies established in 1984 Research and analysis firms of the United States Companies in the S&P 400