How to Use Morningstar Etf Screener for Better Investment Decisions [Tutorial]
The Morningstar ETF screener is one of the most widely used fund filtering tools available, and one of the most widely misunderstood. The five-star rating system that appears prominently throughout the platform is a backward-looking performance ranking, not a forward-looking buy recommendation. An ETF that earned five stars over the past three years is simply the fund that outperformed its category peers over that period. Whether it will continue to do so is a separate question that the star rating does not answer.
This tutorial walks through how the Morningstar ETF screener actually works, how to use its filters correctly, what the Morningstar Medalist Rating adds, and where to supplement Morningstar data with a more fundamentals-oriented stock-level screener like ValueMarkers.
Key Takeaways
- The Morningstar star rating ranks past performance within a category on a risk-adjusted basis. It does not predict future returns. Studies consistently show that five-star funds revert toward the mean over the following three to five years.
- The Morningstar Medalist Rating (Gold, Silver, Bronze, Neutral, Negative) is an analyst-assigned forward-looking assessment. It is more useful than the star rating for selecting ETFs to hold long-term.
- Morningstar categories group ETFs by investment style and geography, making fund comparison meaningful only within the same category.
- Expense ratio, AUM, and trailing returns are readily available in Morningstar. Holdings-level fundamental quality (ROIC, P/B of underlying stocks) requires a dedicated stock screener.
- ValueMarkers covers 120+ indicators across 73 global exchanges and lets you evaluate the individual stocks inside any ETF's portfolio, filling the gap Morningstar leaves at the holdings level.
- The Piotroski F-Score, P/B ratio, and dividend yield are all accessible in ValueMarkers for the individual companies held by any ETF you are evaluating.
How the Morningstar ETF Screener Is Structured
Morningstar.com provides a free ETF screener under the "Funds" tab. The full tool, including Medalist Ratings and detailed portfolio analytics, requires a Morningstar Premium subscription.
The screener has four main filter sections.
Category filters. Morningstar assigns each ETF to one of its proprietary categories (e.g., "Large Blend," "Foreign Large Growth," "High Yield Bond"). These categories are the unit of comparison for star ratings. You cannot meaningfully compare a Large Blend ETF's star rating to a High Yield Bond ETF's star rating.
Performance filters. Return over 1, 3, 5, and 10 years relative to the category average. Also total return in absolute terms.
Rating filters. Star rating (1 to 5 stars) and Medalist Rating (Gold, Silver, Bronze, Neutral, Negative). These are separate systems measuring different things.
Basic characteristics. Expense ratio, AUM, inception date, and fund domicile.
The free version shows all of these. Premium adds portfolio analytics (style box, sector weights, holdings-level data) and analyst research reports.
Step 1: Ignore the Star Rating for Selection, Use It for Elimination
The five-star rating does have one valid use: eliminating clear underperformers.
A consistent one-star or two-star fund over five or more years is a fund that has systematically underperformed its peers on a risk-adjusted basis. That is useful information. You do not want to own a fund that has failed to keep pace with similar funds after adjusting for the risk it took.
What the star rating cannot tell you is which three-star, four-star, or five-star funds will perform best. Morningstar's own research, published in 2014 and updated subsequently, found that the Morningstar Medalist Rating is a significantly better predictor of future relative performance than the star rating.
Set the star rating filter to exclude one-star and two-star funds. Then stop using it.
Step 2: Use the Medalist Rating as Your Primary Quality Signal
The Medalist Rating (Gold, Silver, Bronze) indicates that Morningstar's analysts believe the fund will outperform its category benchmark on a risk-adjusted basis over a full market cycle. Neutral means analysts expect it to roughly match. Negative means they expect it to underperform.
The assessment covers three pillars: People (the fund management team, important for active ETFs), Process (the investment strategy and index methodology), and Parent (the fund company's stewardship and cost practices).
For passive ETFs tracking broad market indices, the Medalist Rating typically differentiates funds by cost and index quality, not by active manager skill. A Vanguard or iShares fund tracking the MSCI World at low cost will generally receive Gold or Silver. An expensive actively managed ETF with weak methodology gets Neutral or Negative.
Filter for Gold and Silver Medalist Ratings as your starting pool. This typically leaves you with 50 to 200 ETFs depending on asset class, a much more workable number than the full universe.
Step 3: Filter by Category and Compare Correctly
Within your Gold and Silver Medalist pool, filter to your target category.
If you want US large-cap equity exposure, filter for the "Large Blend" or "Large Value" category. If you want global exposure, filter for "World Large Stock." Comparing a Large Blend ETF to a World Large Stock ETF on raw returns is meaningless because the opportunity sets differ.
Within a category, sort by expense ratio. For passive ETFs within the same category tracking similar indices, the lower cost fund will almost always produce better net returns over the long run. The performance of an ETF tracking the S&P 500 is determined 90%+ by the S&P 500's performance. The expense ratio determines most of the remaining 10%.
| Morningstar Category | Example ETF | Expense Ratio | Morningstar Rating |
|---|---|---|---|
| Large Blend | Vanguard S&P 500 ETF (VOO) | 0.03% | Gold, 5 stars |
| Large Blend | iShares Core S&P 500 ETF (IVV) | 0.03% | Gold, 5 stars |
| World Large Stock | Vanguard Total World ETF (VT) | 0.07% | Gold, 4 stars |
| Foreign Large Growth | iShares MSCI EAFE ETF (EFA) | 0.32% | Bronze, 3 stars |
| Large Value | Vanguard Value ETF (VTV) | 0.04% | Gold, 4 stars |
Within the same category and similar index methodology, cost is the primary differentiator for passive ETFs.
Step 4: Use Portfolio Analytics to Check Holdings Concentration
If you have Morningstar Premium, the Portfolio tab for each ETF shows holdings, style box positioning, sector weights, and regional exposure.
Check three things in the Portfolio tab.
First, the top 10 holdings and their percentage of fund assets. For a well-diversified broad market ETF, no single holding should exceed 5% to 8% of assets. For concentrated factor ETFs or sector ETFs, concentration will be higher by design.
Second, the style box position. Morningstar's nine-square style box plots ETFs on a value/blend/growth axis (horizontal) and small/mid/large cap axis (vertical). An ETF marketed as "value" that plots in the "blend" box has drifted from its stated mandate.
Third, sector weights compared to the broad market. An "international equity" fund with 30% in financials has a specific bet on European banks, not a neutral global allocation.
If you do not have Morningstar Premium, you can get holding weights directly from the ETF provider's website, which publishes them daily.
Step 5: Supplement Morningstar With Holdings-Level Fundamental Screening
This is the critical gap in the Morningstar ETF screener: it does not tell you whether the stocks inside the ETF are cheap, earning above their cost of capital, or carrying excessive debt.
Morningstar shows you performance, cost, and style. It does not show you the Piotroski F-Score, ROIC, or forward P/B of the underlying holdings. For a value investor, these metrics are the ones that actually predict long-term outperformance.
Once you have a shortlist of two or three ETF candidates, pull their top 20 holdings from the provider website. Run those tickers through the ValueMarkers screener. Check the following for each holding.
Piotroski F-Score. Scores of 7, 8, or 9 indicate financially strong companies. Scores of 1 or 2 indicate financial weakness. An ETF whose top holdings cluster around F-Scores of 6 to 9 is holding fundamentally sound businesses.
P/B Ratio. Value ETFs should hold stocks with P/B ratios below the broad market median. The S&P 500 median P/B runs around 3.5 as of early 2026. A "value" ETF whose median holdings P/B is above 3.0 is not actually tilting toward value in any meaningful way.
Dividend yield. For dividend ETFs specifically, check whether the underlying yields are sustainable. Johnson & Johnson (JNJ) at a 3.1% yield with 62 consecutive years of dividend growth is a different category of payer than a high-yield ETF holding companies with yields above 6% supported by declining earnings.
Step 6: Build Your Comparison Table Before Deciding
Before selecting a final ETF, build a comparison table. Compare the two or three shortlisted ETFs on cost, Morningstar Medalist Rating, index methodology, AUM, and the holdings quality score you derived from your stock-level screening.
| ETF | TER | Medalist Rating | AUM | Holdings Median ROIC | Holdings Median P/B |
|---|---|---|---|---|---|
| ETF A (World Large Stock) | 0.12% | Gold | $48B | 14.2% | 2.8 |
| ETF B (World Large Stock) | 0.20% | Silver | $12B | 12.8% | 3.1 |
| ETF C (World Large Stock) | 0.35% | Bronze | $3B | 10.4% | 3.6 |
The table makes the decision visible. ETF A dominates on cost, quality signal, and AUM. The only reason to choose ETF B or C would be if their index methodology offered something ETF A does not, such as specific country exclusions or a fundamentally different weighting methodology.
When to Look Beyond Morningstar
Morningstar's coverage is strongest for US-listed mutual funds and the largest US-listed ETFs. Coverage becomes thinner for smaller and newer ETFs, international ETFs listed outside the US, and more specialist products.
For European-listed UCITS ETFs on exchanges like the London Stock Exchange, Frankfurt, or Amsterdam, Morningstar's Medalist Rating coverage is limited. JustETF is a stronger platform for fund-level data on UCITS ETFs, and the ValueMarkers screener remains the best option for evaluating the quality of underlying holdings across all 73 exchanges we cover.
Further reading: SEC Investor.gov · FINRA
Why morningstar star rating ETF Matters
This section anchors the discussion on morningstar star rating ETF. The detailed treatment, formula, and worked examples appear in the body of this article above. The points below summarize the most important takeaways for value investors who want to apply morningstar star rating ETF in real portfolio decisions. ValueMarkers exposes the underlying data on every covered ticker via the screener and stock profile pages, so the concepts in this article translate directly into actionable filters.
Key inputs for morningstar star rating ETF
See the main discussion of morningstar star rating ETF in the sections above for the full treatment, including the inputs, the calculation methodology, the typical sector benchmarks, and the most common pitfalls to avoid. The ValueMarkers screener lets value investors filter the full universe of 100,000+ stocks across 73 exchanges using morningstar star rating ETF alongside the rest of the 120-indicator composite, with sector percentiles and historical trends shown on every stock profile.
Sector benchmarks for morningstar star rating ETF
See the main discussion of morningstar star rating ETF in the sections above for the full treatment, including the inputs, the calculation methodology, the typical sector benchmarks, and the most common pitfalls to avoid. The ValueMarkers screener lets value investors filter the full universe of 100,000+ stocks across 73 exchanges using morningstar star rating ETF alongside the rest of the 120-indicator composite, with sector percentiles and historical trends shown on every stock profile.
Related ValueMarkers Resources
- Piotroski F-Score — Piotroski F-Score captures the reliability of reported earnings versus underlying cash flow
- Dividend Yield — Dividend Yield is the metric used to how cheaply a stock trades relative to its fundamentals
- Pb Ratio — Glossary entry for Pb Ratio
- Etf Screener — related ValueMarkers analysis
- London Stock Exchange Etf Screener — related ValueMarkers analysis
- Tikr Terminal — related ValueMarkers analysis
Frequently Asked Questions
what is morningstar rating
The Morningstar rating is a system for evaluating mutual funds and ETFs. The star rating (1 to 5 stars) ranks funds on risk-adjusted past performance within their category, over 3, 5, and 10 year periods. The Morningstar Medalist Rating (Gold, Silver, Bronze, Neutral, Negative) is an analyst-assigned forward-looking assessment based on People, Process, and Parent pillars. The two systems operate independently, and a fund can carry a three-star rating alongside a Gold Medalist designation if analysts believe it will outperform despite average recent performance.
canary capital xrp etf
Canary Capital filed for a spot XRP ETF with the SEC in late 2024, making it one of the earliest crypto ETF applications beyond Bitcoin and Ethereum. The fund would track XRP, the native token of the XRP Ledger. SEC approval would require the same framework applied to Bitcoin ETFs, specifically proof of a regulated futures market or a comprehensive surveillance sharing agreement. As of early 2026, SEC review of spot XRP ETF applications was ongoing, with no final approval issued.
canary xrp etf approval
The Canary Capital XRP ETF approval process depends on SEC acceptance that the XRP spot market has sufficient surveillance mechanisms to detect and deter manipulation. The SEC approved spot Bitcoin ETFs in January 2024 and spot Ethereum ETFs in May 2024. XRP applications followed, but XRP's regulatory history (the SEC lawsuit against Ripple, settled in 2024) complicated the path. Industry analysts estimate a decision on XRP spot ETF applications by mid to late 2026 if the regulatory environment remains favorable.
how to use stock screener
To use a stock screener effectively, start with broad filters that eliminate unsuitable candidates: minimum market cap, liquidity, and exchange. Then apply fundamental filters relevant to your strategy, such as P/E below 20 for value investors, ROIC above 12% for quality investors, or Piotroski F-Score above 6 for financial strength. Sort the remaining list by your primary metric and work through the top results with individual analysis. The ValueMarkers screener allows you to apply 120+ indicators across 73 exchanges, which is more than sufficient for any value or quality-oriented screening approach.
is vug considered a growth etf
VUG (Vanguard Growth ETF) is a large-cap growth ETF that tracks the CRSP US Large Cap Growth Index. It is widely considered a core growth ETF, holding names like Apple, Microsoft, Nvidia, Amazon, and Meta. The fund's portfolio tilts strongly toward high P/E, high revenue growth businesses relative to the S&P 500 broad market. As of early 2026, VUG holds approximately 200 stocks with a weighted average P/E well above the S&P 500 median, and technology plus consumer discretionary together represent over 60% of the portfolio.
how to use stock screener in tradingview
TradingView's stock screener is primarily designed for technical and price-based filtering: moving averages, RSI, volume, price patterns, and relative performance. For fundamental value investing criteria, TradingView's screener is limited compared to dedicated platforms. You can filter by P/E and market cap in TradingView, but ROIC, Piotroski F-Score, free cash flow yield, and most of the indicators value investors rely on are not available. For fundamental screening, the ValueMarkers screener covers 120+ indicators including the ones TradingView omits.
Combine the Morningstar ETF screener's fund-level ratings with genuine holdings analysis. Use ValueMarkers to screen the underlying stocks in any ETF by screener indicators like Piotroski F-Score, P/B, and dividend yield across 73 global exchanges.
Written by Javier Sanz, Founder of ValueMarkers. Last updated April 2026.
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Disclaimer: This content is for informational and educational purposes only and does not constitute investment advice, a recommendation, or an offer to buy or sell any security. Past performance does not guarantee future results. Consult a licensed financial advisor before making investment decisions.