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What Happens If….?

Product Manager
Product Manager
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A quick scroll through the headlines in 2019 can be a disconcerting experience. What happens if political unrest gets worse? What happens if the economy starts to falter? What happens if interest rates begin to rise? It’s easy to spiral into a rabbit-hole of increasingly unknowable ‘What-Ifs’. Oftentimes these ‘what-ifs’ are centered around the risk that these hypothetical events pose to one’s financial situation. And while myopic headlines are oftentimes best ignored, it’s increasingly important to understand risk in the investing process no matter if that risk is inherent to a particular approach or introduced by some of these unknown ‘what-ifs.’

Morningstar’s Risk Model in our web-based versions of Direct helps you do just that, and our recent enhancements make it even easier.

What Happens if… interest rates rise or fall?

We recently introduced the first phase of our multi asset risk model. We’ve started with the release of interest rate risk factors, covering corporate, muni, and sovereign bond asset classes.


To view these analytics, use the same risk model components that you have been using for Equity Funds. The Fixed Income statistics will now appear by default for Fixed Income and Balanced Funds.


You can also view how these interest rate factors have behaved historically

Over this year and into next, we will continue to expand coverage of our multi-asset model, and release other types of factors including credit risk.

What happens if… there is a market shock?

We have also released our brand-new Market-Driven Scenario Analysis tool, that allows you to shock any index (or investment) and see a range of outcomes for how that could impact other investments (or indexes) going forward. For a full breakdown of how this tool can be used, take a look at this whitepaper which walks through helpful scenarios. We also hosted a webinar which includes a demo on how to best use this functionality which you can watch here. This is part of the advanced risk model package – along with our other custom scenario analysis functionality – but can be accessed on a trial basis if you’re interested in taking a look. Reach out to your Morningstar representative for more information.


Morningstar’s Risk Model looks to provide sophisticated, yet easy-to-use, analytics on the drivers of risk, return and the impact of various shocks and scenarios. Whether you’re an asset manager, a wealth manager, or somewhere in between, take it for a spin, and let us know what you think.