October 20, 2021

Morningstar Premium Review

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Morningstar Premium offers in-depth investment research and portfolio management tools. Is it worth the yearly fee? Discover the pros, cons, and features.

Morningstar is best known for their popular investment ratings and research. But they have even more to offer.

With Morningstar Premium, you get in-depth investment tracking, tools, and even more research.

So how much does it cost? And is it actually worth it?

Get a detailed guide of the features, price, and competitors of Morningstar Premium in this review. Plus, learn which type of investors would get the most benefit from it.

What is Morningstar Premium?

Morningstar Premium is a paid subscription service that gives retail investors access to advanced investment tools.

Morningstar was initially founded by Joe Mansueto in 1984 and has since grown into a billion-dollar company with more than 6,000 employees.

The platform offers a ton of educational content on investing and personal finance. They also provide helpful worksheets and templates for budgeting and retirement planning.

While much of Morningstar's content is free, you'll have to pay for Morningstar Premium to access features like:

  • Analyst Reports
  • Portfolio Manager
  • Portfolio X-Ray Tool
  • Advanced Research + Proprietary Ratings

Read on to learn more about these features and if they make the Premium subscription worth your while.

Who is Morningstar Premium Best for?

Costing $199 per year, Morningstar Premium is most suitable for investors with larger portfolios.

It wouldn't make sense to recommend it to someone with a $5,000 portfolio because they'd need to earn more than 4% a year just to cover this single expense, making it a poor cost/benefit decision.

That said, Morningstar's free educational content and investor tools, such as stock/fund screeners, would be helpful for any investor.

Morningstar Premium Pros and Cons

Looking for the quick takeaway? Before diving into the details of Morningstar Premium, review these quick pros and cons to know if it's right for you.

Pros

  • Access to proprietary Morningstar 5-star ratings and style boxes for mutual funds
  • In depth research reports on thousands of mutual funds and stocks
  • Prebuilt screeners available with ability to customize
  • Portfolio X-Ray tool lets you "see through" your portfolio's funds to see its true exposures
  • Screener universe covers hundreds of thousands of securities
  • Free 14-day Premium trial

Cons

  • The fixed subscription fee makes it unattractive for smaller portfolios
  • The Premium screener doesn't offer backtesting
  • The mobile app has limited functionality compared to the website
  • Many Premium subscribers complain of bugs and software issues on their website

Are Morningstar ratings reliable? Morningstar's 5-star rating system is a purely quantitative rating that calculates historical risk-adjusted returns for mutual funds and compares them to their peer groups. The ratings are retrospective and not intended to be an indicator of future performance. Only the top 10% of funds receive 5 stars - the top rating.

Morningstar Plans and Features

Morningstar has two account types: Basic (free) and Premium ($199/year).

The basic account offers helpful content and tools, including educational articles on finance and investing. It also includes limited access to their stock/fund screener and Portfolio X-Ray tool, which we'll describe in the next paragraph.

If you sign up for a Premium subscription, you'll get a suite of Morningstar's proprietary portfolio management tools and more advanced research.

Here are the most useful features within Morningstar Premium:

  • Full Analysis Reports: Morningstar assembles in-depth reports on thousands of stocks and mutual funds.

    These reports include business strategy and outlook, economic moat, fair value and profit drivers, risk and uncertainty, stewardship, and Morningstar's own rating.

  • Portfolio X-Ray tool: This tool looks through all the pooled holdings and stocks in your portfolio to calculate your true exposures to different sectors and stocks.

    Portfolio X-Ray Tool Example: Let's say you own Apple stock and have money in a Nasdaq-tracking mutual funds, which also hold Apple. The X-Ray tool can peek into your funds and calculate your total Apple exposure across all your investments. This is especially valuable as your portfolio grows and increases in complexity.

  • Best Investments: This feature gives you the top investment picks from Morningstar's 220 independent analysts.

  • Premium Stock Screener: This more robust version of the stock screener comes with extra bells and whistles, including their 5-star rating system, Style Box for mutual funds, and prebuilt screens for specific strategies.

Morningstar Stock Screener

Morningstar Premium's Stock Screener is one of the best features of the paid subscription to Morningstar.

You can search and filter stocks by performance, financials and what rating they received. Or simply browse their different prebuilt screens and their descriptions.

For example, the "Cash Cows" screen identifies companies with exceptionally strong cash flow and growth.

Morningstar also lets you customize their prebuilt screens by adjusting, adding, and removing criteria. That way, you can easily find stocks that meet your criteria in real-time as you make changes.

Besides the Morningstar ratings and style box for funds, other criteria you can use include sector/industry, market cap, and valuation metrics such as P/E and dividend yield.

Once you are happy with your criteria selections, you can save the resulting stocks and move them over to the Portfolio Manager for further review and research.

You can also save any customized screens you built for future use. One downside of the Premium screener is that it doesn't include any historical backtesting capability.

There's no shortage of investment research out there to take advantage of. Check out our guide to the best investment websites to bring your investments to the next level.

Morningstar Mobile App

For those who like to monitor their portfolio on the go, Morningstar offers a mobile app for iOS and Android devices.

The app seamlessly links to your account so you can monitor your portfolio from anywhere.

But keep in mind: while the app is great for viewing your portfolio in real time, the bulk of your research and portfolio management is best suited for the desktop version since the app doesn't include the same tools.

How Much Does Morningstar Premium Cost?

Morningstar Premium's most expensive plan is the one where you pay month to month, which costs $29.95/month or about $360/year.

However, you can substantially lower this price by subscribing for a year or more. A one-year subscription will cost you $199/year.

To save even more, you can sign up for three years and pay only $150/year. They also offer a 14-day free trial so there is no risk in giving it a try.

Is there a Morningstar Premium discount?
As we noted above, you can currently pay as low as $150/yr. for Morningstar by subscribing for more than one year. From time to time, they also offer special, limited time offers for further discounts.

Is Morningstar Premium Worth the Money?

If your portfolio is on the smaller size (say, less than $20,000), the cost/benefit analysis is not worth it as you'd need to earn 1% a year just to cover your Morningstar fee.

If you have a larger portfolio and invest a lot in mutual funds, the Morningstar Premium subscription is likely worth it.

In that case, the $199 subscription fee becomes a smaller percentage amount of your portfolio. For example, with a $100,000 portfolio, only 0.2% of your annual return goes to Morningstar.

Morningstar does a great job of quantitatively evaluating a huge universe of mutual funds based on many criteria. They identify those that have offered the most attractive risk-adjusted returns in the past few years relative to their peers.

Their analysis looks deeper than how much a fund beat its benchmark. It looks at the return relative to how much risk the portfolio manager took and relative to how other funds with similar investment strategies performed.

Their platform makes it easy to efficiently identify the strongest funds based on historical data.

How to Contact Morningstar Customer Service

For any questions that can't be answered via their website self-help tools, you can contact Morningstar customer service by:

  • Sending an email to OfficeQuestions@morningstar.com

  • Calling 866-215-2503 between 8:00am to 5:00pm (CST) Monday through Friday

Keep in mind that some members have expressed disappointment in recurring software bugs/issues on their platform that have not been addressed despite reaching out to product support.

How to log into your Morningstar Premium account:
  1. Visit Morningstar.com
  2. Find the "Sign In" link in the upper right corner of the homepage
  3. Sign in with your email and password

Morningstar Alternatives

Morningstar Premium offers a strong platform when used by the right investor, especially those that invest heavily in mutual funds. That said, it's always smart to see how they stack up to popular competitors, like the ones below.

Morningstar vs. Zacks
Zacks, popularly known for its small cap research, is like Morningstar in many ways.

Zacks also offers a free/basic membership with access to their weekly newsletter and stock picks in addition to basic portfolio research and screening tools. Just like Morningstar, Zacks also has a quantitative rating system that they apply to thousands of stocks and mutual funds.

Zack's is a bit more expensive than Morningstar, with their paid membership starting at $249/yr. This gives you access to Zack's proprietary ratings and research, in addition to more advanced screening tools.

Both platforms are similar, though the things that set Morningstar apart are their quantity of data, recognizable brand, and rating system.

Morningstar's mutual fund ratings are all relative to other funds in the same strategy, which makes for a more precise comparison when you're trying to decide between similar funds.

Which is better: Zacks or Morningstar?
While they are both very similar, we would choose Morningstar simply because of its lower price, greater amount of information, and more recognized brand when it comes to mutual fund ratings. That said, both offer a free trial, so why not give both a try?

Morningstar vs. Motley Fool
While Morningstar is ideal for more hands-on investors who enjoy doing their own research, Motley Fool (aka "The Fool") is geared toward investors who only want specific stock buy/sell alerts.

The Fool offers several different subscription options ranging widely in price from just $100/year to more than $3,000.

A subscription to The Fool is not quite an all-in-one "portfolio management" platform like Morningstar, but more like a subscription newsletter. Depending on which package you sign up for, they will send you a weekly or monthly newsletter that includes a couple of new stock ideas.

The stocks they send you vary based on your subscription. For example, one option is called "Discovery: 10x" package and promises to search only stocks with the most potential to return 1,000% or more.

Bottom Line: Is Morningstar Premium worth it?

The bottom line is that for the right investor/portfolio, Morningstar Premium can be a tool that adds value and makes managing your portfolio a more efficient and enjoyable experience.

While smaller portfolios should generally avoid paying for subscription services, the cost/benefit ratio becomes more favorable to investors managing more than $20,000.

And if you rely heavily on mutual funds in your portfolio, you might just find Morningstar's research, ratings, and screening capabilities to be invaluable to your process.

Ally Invest Coupon Codes

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Betterment

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Write to Andrew Fitzgerald at feedback@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.

Note: This website is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content. You do not have to use our links, but you help support CreditDonkey if you do.

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