How to (And Not to) Use Morningstar's New Tools

With a bevy of tools for all your fund-investing needs, here’s how you can make the most of
By Nazim Khan |  01-02-13 | 

We recently added several new functionalities to to help investors take more informed decisions with their investments.

While we’ve tried our best to make the tools easy-to-use, it would be worthwhile for us to spend some time explaining how to (and not to) use them for your investment-research purposes.

So first, here are a few tips and best practices over using the tools that would serve you well.

• The primary purpose of most screeners is to short-list investments worthy of further research rather than worthy of investment. As it is with star ratings, screeners will help you unearth investments quickly that you may not come across easily in the gamut of offerings available. Remember screeners always base their results on past performance, which as they say, may or may not sustain in the future.

• When looking at any fund or category’s performance metric, try not to read too much into short-term performance (up to three years) especially if you are looking up an equity instrument as stocks can be unpredictable and volatile in the short term and it may not be indicative of the investment's true long-term potential.

• If you are screening funds from different categories (for instance, a large-cap and a mid-cap fund, or an equity and a debt fund), do not compare their returns as dissimilar funds may fare differently in a certain market environment.

With that out of the way, let’s ride across what you can do with the toolbox we have for you.

Performance tools

Fund Performance

A nifty tool that gives you the detailed performance of any fund in an instant. The performance page of any mutual fund gives you a “Growth of 10,000” chart and lists down year-on-year performance of the fund, compared to category average and the difference in the fund’s performance compared to the category average.

You also see the fund’s trailing returns over different time periods along historical quarterly and monthly return.

Category Performance

This tool will help you look up the performance of any mutual fund category over various time periods. Returns over one year are annualized.

Fund Risk Measure

The tool will lead you to any fund’s Risk and Rating page, which comprises of four components: Morningstar’s measure of the fund’s historical risk and return statistics for the fund across various timeframes, along with its risk-adjusted return (star) rating.

The other components list the fund’s various MPT statistics such alpha, beta, R-squared and Treynor ratio, volatility measures such as standard deviation, Sharpe ratio and Sortino ratio, along with the upside and downside capture ratios.

A detailed explanation of each of these measures can be found on’s Investing ABC page on the Personal Finance tab.

Category Risk Measure

Carry out the previous exercise but this time with fund categories instead of an individual fund and look up how each fared across various time periods.

Top-Performing Fund

Screen top performers across fund categories and time periods.

Performance Comparison

Compare trailing returns of various (upto five) funds for different time periods.

Portfolio Tools

Detailed Portfolio

The tool will lead you to the detailed holdings page for any fund (which can also be found on the quote pages of various funds).

Our portfolio page will provide you just about everything you want to know about a fund’s portfolio, including total number of stocks held, recently bought, sold, etc.

Indian Sector Exposure

Look up any fund’s (up to five) exposure to various sectors.

Indian Credit Quality

Look up any bond fund’s credit quality as specified by various ratings agency.

Stocks Held by Funds

How many funds hold a particular stock and in what quantity: find out with this tool.

Most Popular Stock for Funds

Find out popular stocks for mutual funds on the basis of market value, change in shares or number of funds holding the stock.

Fund Sector Exposure

Screen mutual funds on the basis of their exposure to various super sectors, sectors, groups and industries.


Returns Calculator

Find out point-to-point percentage returns for any five time periods and for any five mutual funds.

SIP Calculator

Add up to three mutual funds to find your returns had you invested in them through the systematic investment planning, or SIP, mode.

Apart from these, the Tools page also lists our long-existing advanced Screeners, Quickrank and Compare tools, the powerful Instant X-Ray and the Morningstar Portfolio Manager. Go ahead and discover them if you haven’t yet.

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