What You Get With a Morningstar Premium Subscription

Morningstar.co.uk Premium Membership provides investors with a complete and independent resource for researching, managing and monitoring their investments

Morningstar.co.uk Editors 3 July, 2015 | 10:49AM
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Welcome to the Homepage of Morningstar.co.uk. This is the four tutorial video which focuses on additional features offered exclusively to premium members. The key benefits of a premium subscription are sophisticated portfolio analysis tools such as X-Ray and Portfolio Monitor Report, access to our analysts’ opinions on stocks, funds investment trusts and ETFs and a deeper level of equity data such as live share prices broker forecasts and director dealings.

Let's get started and show you some of these great features. I'm going to go to the Portfolio button. This portfolio contains a range of stocks and funds from different regions and sectors, but how can I check if this portfolio is truly diversified.

As a Premium member, you can click on the X-Ray icon where in seconds your portfolio will be analysed, revealing the true asset allocation and areas of potential weakness. Let's first take a look at the geographical spread of this portfolio.

As you can see the allocation of my assets across the three key regions is fairly balanced, but looking in more detail I can see that I only have 7.5% exposure to Western Europe, meaning I'll largely miss out on any investment gains in that region.

X-Ray identifies where I have investment gaps so I can choose to address them. So, now let's take a look at the sector spread of my portfolio.

I can already see that 10% of my portfolio is invested in companies that fall into the defensive sector, now everyone has their own investment style, but I'm a more risk-averse investor, so I should potentially be allocating more of my money to defensive companies an X-Ray tool has made me aware of that.

If we look closely, we can see that I only have 1% of my assets invested in utilities. So, this is an area I might look to build up on in the future.

Now you can test the impact of your asset allocation of buying or selling an investment by adding a transaction to your portfolio and then x-raying again to compare the results. X-Ray also collates the characteristics of individual stock holdings, analyses your investment style and highlight any stock overlap within funds. So, if I want to find investments that will help me balance my portfolio I want to ensure I'm invested in the best investments in each area.

As a Premium member, I've got Morningstar's entire stock and fund research team helping me out.

Let's take a quick look at some examples of our analyst research available to premium members only. Here's a look at Morningstar Equity Research. We have here the page for Centrica the company that owns British Gas. Let's have a look at Morningstar opinion of this company. Go ahead and click on the Morningstar research tab.

I can see the Morningstar analyst long-term view on the stock, including their investment thesis, an assessment of whether Centrica has a sustainable competitive advantage known as economic moats, their valuation, potential risks, and management overview.

For stocks we compare analyst fair value estimate to the current market price to allocate a star rating. One star would mean the stock is currently very expensive in our view and five stars would indicate that it's very cheap, while three stars shows the market pricing is about right. So as you can see if Centrica, we have a four-star rating here, meaning that we think it's currently undervalued by the market.

Now let's take a look at Morningstar Fund Research. Here is the Old Mutual U.K. Equity Fund it has a three-star rating which is a risk adjusted measure of its performance over the past three years.

Three star implies the fund has achieved return broadly in line with category peers. The fund also has bronze medal rating from our analyst. On a range of negative through neutral to bronze, silver and gold, an analyst rating of bronze is a good rating and implies we believe it will outperform peers in the long-term. Our analysts have even more conviction in silver and gold rated funds.

Let's take a look at the research. Morningstar analysts assess the company, the management team, investment process, past performance and price, when setting a medal rating. Let's head back to the portfolio page, so I can show you another premium feature. Now what if I want to read analyst reports on my investments, track the performance of my portfolio, understand how my asset allocation has changed and predict the future value of my investments on a regular basis.

This is where our premium portfolio more to report comes in handy. It combines all this into a monthly print friendly PDF document that is automatically emailed to you.

To set this up simply click on the Portfolio Monitor report button on the portfolio page. Select the portfolio, you'd like to receive reports on, and then click on save. As the pop-up box mentions you will receive your PDF report within the first week of every month. For now here's an example of the Portfolio Monitor report.

As you can see the report contains the top five gainers and top five losers within the portfolio and also projects how much a portfolio could be worth in 10, 20 and 30 years' time and performs also an x-ray on your asset allocation.

You'll also notice that the Portfolio Monitor report includes our analyst report for each stock and fund you hold under our coverage. So, these are just some of the benefits of a premium subscription. To find out more, go to the premium membership button on the Morningstar.co.uk Homepage. You can get instant access to all the premium features when you take a free 14-day trial.

In the next video we're going to look at Morningstar's research a bit more closely, including analyst opinions and how to understand Morningstar star and medal ratings.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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Morningstar.co.uk Editors