Mutual Fund Research Tools
Stock Research Tools
If you are in the trading world, then you may be interested to hear about Morningstar. Morningstar is an investment news and advisor tool with numerous features, as well as many in-house analysts. So, is Morningstar the right move for you? Read to find out.
Morningstar is an investment news and adviser tool that relies on recommendations from a large team of in-house analysts. While Morningstar does offer tools for investing in stocks, it is most popular among long-term investors looking to move money into mutual funds. The focus on mutual funds, as well as ETFs and bonds to a lesser degree, differentiates Morningstar from similar investment advice services such as Zacks, although there is still a large degree of overlap between the two.
Morningstar offers both free and Premium services, with Premium accounts offering access to the platform’s detailed stock, mutual fund, ETF, and bond ratings and advanced screeners. While Morningstar can be used for free with some success, a Premium account unlocks much more of the information put together by the service’s analysts and is more suitable for traders who are looking to actively invest.
Morningstar Premium starts with a 14-day free trial, after which the service costs $29.95 per month or $199 per year. While this is somewhat cheaper than a Zacks Premium membership, the two services are comparable in price.
The main attractions of a Morningstar Premium membership are the rating lists, which are updated daily by the analysts at Morningstar. These lists offer picks of the best stocks, ETFs, mutual funds, and bonds based on analysts’ predictions.
For stock traders, the “5-Star Stocks” and “Wide Moat + Undervalued” lists will be the most valuable. These lists focus on stocks that Morningstar analysts feel are undervalued relative to their fair price. However, keep in mind that you’ll need to do most of your own research on any stocks you find in the list. Unlike Zacks and other stock picking services, these stocks are not categorized according to their growth potential, industry, or technical factors. In addition, because the listed stocks are based only on a somewhat murky star rating, you won’t see these lists of highly rated stocks change on a day-to-day basis as you would on Zacks.
Where Morningstar is unique compared to other services is in offering similar rating lists for ETFs and mutual funds. These lists are again based on funds that have been highly rated by Morningstar analysts, although there is relatively little formulaic explanation behind the ratings. In addition, as you might expect for funds, these lists only turn over every several months.
Finally, Morningstar offers rating lists for four different categories of bonds: high-yield bonds, foreign bond funds, bond index funds, and core bond funds. While these rating lists may be a helpful place to start for some bond traders, they don’t offer the level of detail that more advanced traders will need to make decisions about investing.
Morningstar offers a widely used free screener for mutual funds, but Premium subscribers get access to a more advanced fund screening tool. With this tool, you have much more flexibility to build a custom screen one parameter at a time – you can choose from virtually any measurable factor about a mutual fund and add conditionals to determine what makes it through your screen.
Even better, the displayed results in the Premium fund screener are customizable. You can add nearly 100 different columns to the results table, making it significantly easier to sort data based on the criteria that matters to you. However, note that you cannot easily export the results to Excel for further investigation.
Another useful feature for discovering new mutual funds is the similar fund screener. With this tool, you can enter a mutual fund and Morningstar will return a list of funds that are similar in performance, portfolio allocation, and load. This is a useful tool for mutual fund investors looking to diversify, although it may not see enough use to warrant a Premium subscription on its own.
The cost analyzer is another useful tool for comparing mutual funds, although it’s not clear why this tool is limited to Premium members since similar free analyzers are available online. The cost analyzer allows you to enter multiple mutual funds and returns information about how much they will cost based on a given starting investment and recurring investments.
Morningstar posts numerous new articles written by its analysts every day. Although most of these articles are free for anyone to access without a Morningstar subscription, there are occasional articles that are limited to subscribers. Typically, these articles revolve around stock picks – such as lists of the five best buys in a certain industry – as opposed to articles discussing the merits of a specific stock.
Morningstar Platform Differentiators
Morningstar Premium offers a suite of tools to help investors make informed decisions about investing in stocks, mutual funds, ETFs, and bonds. While the platform does offer useful tools for stocks, ETFs, and bonds, it falls short of competitors – most notably Zacks – when it comes to providing actionable information and advanced categorization options.
As a result, Morningstar Premium stands out most for its mutual fund tools and analysis. Having analyst opinions on mutual funds can be extraordinarily helpful for investors given the plethora of funds available, and the rating lists are just useful enough to warrant a Premium membership for frequent fund investors. In addition, the Premium fund screener is arguably the most advanced mutual fund screening tool available on any platform.
What Type of Trader is Morningstar Premium Best For?
Morningstar Premium is best for investors who frequently invest in mutual funds and want to diversify their portfolios. Morningstar Premium not only offers analyst-backed ratings of top funds to help you discover potential new investments, but also has a highly powerful fund screener to help you find funds that fit your exact specifications. The similar funds tool can also be useful for investors who want to diversify their mutual fund holdings rather than continuously invest in a single fund.
While Morningstar Premium does offer tools for stock traders, these tools fall far short of those offered on competing platforms at a similar price. Stock traders would likely get more value out of Motley Fool’s Stock Advisor, Zacks’ Premium Service, or IBD’s Leaderboard and Marketsmith tools.
- Analyst ratings for stocks, mutual funds, bonds, and ETFs
- Premium fund screener is highly customizable
- Similar fund and cost analyzer tools are useful for comparing across funds
- Ratings change over weeks rather than day-to-day, leaving time for further research
- Access to premium articles with stock and fund recommendations
- Stock rating tools fall far short of competing platforms like Zacks
- Data cannot be easily exported to Excel