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Definition: Morningstar Inc
Morningstar Inc. Is an investment research and management firm that compiles and provides data on investment offerings such as stocks, mutual funds, etc. It has its headquarters at Chicago, Illinois and provides global market information and statistics on various equities, indexes, derivatives, commodities, etc. Morningstar Inc. Also provides investment management and advisory services to investors through various tools and investment measures such as the Morningstar risk rating, the Morningstar style box and other proprietary methods.
The Morningstar risk rating ranks investments by assigning them a ranking ranging between one and five stars, with one star representing the poorest rank for the investment and a rank of five stars represents the highest rank. The ranking is assigned to publicly traded mutual funds, exchange traded funds based on the data compiled by Morningstar Inc and they help investors in identifying funds for their portfolio.
The Morningstar style box is a graphical method of characterising equities, fixed income investments, etc. The equity style box characterises securities into one of nine classifications on the basis of the market capitalization and the investment strategy based on the basis of investment valuation (dividend payment or growth outlook). On similar lines, fixed income securities are also categorized on the basis of interest rate sensitivity and the credit quality of the investment.