Some ETFs have “buff” in their names, but that doesn’t mean they’re strong performers. Buffer funds have become the largest category within ETFs by number of products, and they are among the fastest growing by assets. By employing options, they offer protection from losses, but that doesn’t necessarily serve most long-term investors well, according to a recent report from Morningstar. “They definitely fit best with investors that have shorter time horizons,” said Zachary Evens, Morningstar manager resea ...

Revenue and Growth Metrics - Morningstar Data's annual revenue renewal rate is estimated to be 101% in 2025, up from 99% in 2024[23] - Morningstar Direct's annual revenue renewal rate is estimated to be approximately 104% in 2025, down from 106% in 2024[30] - PitchBook's annual revenue renewal rate is estimated to be approximately 103% in 2025, down from 108% in 2024[46] - Morningstar Sustainalytics' annual revenue renewal rate for license-based products was approximately 93% in both 2024 and 2025[87] - License-based revenue represented 70.3% of Morningstar's 2025 consolidated revenue, down from 71.4% in 2024[111] - Asset-based revenue accounted for 14.0% of consolidated revenue in 2025, compared to 14.6% in 2024[112] - Transaction-based revenue represented 15.7% of consolidated revenue in 2025, an increase from 14.0% in 2024[112] - In 2025, net flows across Investment Management, including Morningstar Model Portfolios, were approximately $2.0 billion[61] Market and Asset Management - Morningstar Credit's global ratings market is estimated to total approximately $11.8 billion for the trailing 12 months ended September 30, 2025[49] - As of December 31, 2025, Investment Management's assets under management (AUMA) totaled $72.8 billion[60] - As of December 31, 2025, Morningstar Retirement AUMA totaled $305.2 billion[75] - In 2025, Morningstar added around 290 retirement plans and 17,000 participants across its advisor managed accounts network[76] Product Innovations and Acquisitions - The acquisition of Lumonic Inc. is expected to enhance PitchBook's portfolio monitoring and risk assessment capabilities[40] - Morningstar Indexes introduced several new product innovations in 2025, particularly in private markets and thematic research[89] - Morningstar completed two acquisitions in 2025 to support its growth objectives[114] - Morningstar launched the AI Insights API, providing generative AI summaries of key fund and equity characteristics[24] Employee and Organizational Metrics - The company had 10,973 permanent, full-time employees globally as of December 31, 2025[100] - Morningstar's overall employee engagement score increased to 66% in 2025 from 64% in 2024[104] Regulatory Compliance and Adaptation - Morningstar operates under various regulatory frameworks across multiple jurisdictions, including the US, Canada, and the EU, ensuring compliance with local laws[128] - The company is adapting its business model for new EU ESG Rating Provider Regulations, indicating a proactive approach to regulatory changes[132] - Morningstar Investment Management is registered with the SEC and has fiduciary obligations to clients, ensuring compliance with investment advisory regulations[131] - The company continues to monitor pending ESG legislation, indicating a commitment to regulatory readiness and adaptation[132] - Morningstar Indexes GmbH is authorized to act as an EU benchmark administrator, following the transfer of UK benchmark administration[133] Financial Position and Currency Risk - As of December 31, 2025, Morningstar's cash, cash equivalents, and investments balance was $528.7 million[388] - A 100 basis-point change in the Secured Overnight Financing Rate (SOFR) is estimated to impact interest expense by $7.3 million annually based on the outstanding principal balance[389] - Foreign currency denominated revenue percentages include 2.6% from Australian Dollar, 7.8% from British Pound, 6.3% from Canadian Dollar, and 5.1% from other foreign currencies[390] - The estimated effect of a 10% adverse currency fluctuation on revenue includes a potential loss of $6.5 million from Australian Dollar and $19.3 million from British Pound[390] - The net currency position as of December 31, 2025, includes $43.2 million in Australian Dollar and $220.8 million in British Pound[390] - The estimated effect of a 10% adverse currency fluctuation on equity includes a potential loss of $4.3 million from Australian Dollar and $22.1 million from British Pound[390] - Morningstar has not engaged in currency hedging and does not currently hold positions in derivative instruments to mitigate currency risk[390] Investment Portfolio Management - The company has a diversified investment portfolio that may include stocks, bonds, options, mutual funds, and exchange-traded products[388] - Morningstar's investment portfolio is actively managed and may suffer losses from fluctuating interest rates and market prices[388] Brand and Intellectual Property - Morningstar has registered its brand name and logo in approximately 50 jurisdictions, including the EU, to protect its intellectual property[117] - The company holds several US and foreign patents, including those for portfolio management analysis and improved data processing technologies[118] Strategic Leadership - The company’s executive team includes Joe Mansueto as Executive Chairman, Kunal Kapoor as CEO, and Michael Holt as CFO, with a focus on strategic leadership[135]

You can find original article here WealthManagement. Subscribe to our free daily WealthManagement newsletters. A new Morningstar report, The Role of Semiliquid Funds in Portfolios, argues that private market allocations through semiliquid funds don’t serve as diversifiers for traditional portfolios. Instead, financial advisors should view semiliquid funds that invest in private equity or private credit as expanding their clients’ overall equity and credit allocations. The findings counter one of the key ...

Core Insights - Morningstar Inc. reported earnings per share of $2.71, exceeding the estimated $2.51, indicating strong financial performance [1] - The company's revenue for the period was $641.1 million, surpassing the forecasted $616.1 million, reflecting robust growth in 2025 [2] Financial Metrics - Morningstar's price-to-earnings (P/E) ratio is 17.37, indicating the market's valuation of its earnings [3] - The price-to-sales ratio stands at 2.71, while the enterprise value to sales ratio is 2.95, providing insights into the company's market value relative to its revenue [3] - The enterprise value to operating cash flow ratio is 13.10, reflecting how cash flow is valued in relation to enterprise value [4] - Morningstar's earnings yield is 5.76%, offering a perspective on return on investment [4] - The debt-to-equity ratio is 0.69, indicating a balanced approach to financing assets [4] - The current ratio of 1.04 suggests that the company is well-positioned to cover its short-term liabilities with its short-term assets [4]

News Release 22 West Washington Street Telephone: +1 312 696-6000 Chicago Facsimile: +1 312 696-6009 Illinois 60602 FOR IMMEDIATE RELEASE Morningstar, Inc. Reports Fourth-Quarter, Full-Year 2025 Financial Results CHICAGO, Feb. 12, 2026 - Morningstar, Inc. (Nasdaq: MORN), a leading provider of independent investment insights, reported solid fourth-quarter revenue growth with increases in operating and free cash flows. • Reported revenue increased 7.5% to $2.4 billion compared to the prior year; organic reven ...

Fourth-Quarter 2025 Supplemental Presentation February 12, 2026 including our most recent Forms 8-K, 10-K, and 10-Q. "Organic Revenue" is consolidated revenue before (1) acquisitions and divestitures, (2) adoption of new accounting standards or revisions to accounting practices (accounting changes), and (3) the effect of foreign currency translations. "Adjusted Operating Income (Loss)" is consolidated operating income (loss) excluding (1) intangible amortization expense, (2) the impact of merger, acquisitio ...

Core Insights - The core challenge of retirement planning is shifting from merely encouraging savings to focusing on personalized strategies for income generation and decumulation [1][2] Industry Trends - There is a growing financial awareness among participants, leading to a shift in conversations from the importance of saving to how much to save and invest for retirement income [2] - Standardized investment solutions like target-date funds are becoming common, but there is a need for personalized guidance to improve outcomes for employees [3] Personalization in Retirement Planning - Managed accounts are increasingly central to 401(k) plans, with access rising from 17% in 2014 to 42% in 2023, indicating a trend towards personalized investing [4] - Higher fees associated with managed accounts may be justified, as they can increase the wealth-to-salary ratio at age 65 by 7.7% compared to target-date funds and self-directed portfolios [5] Behavioral Insights - Individuals using managed accounts tend to save more and maintain their investment course longer, regardless of market conditions, due to a more comprehensive view of their financial situation [6]

You can find original article here WealthManagement. Subscribe to our free daily WealthManagement newsletters. PitchBook has launched PitchBook Valuation Estimates, a daily framework that the firm says will provide a “consistent, independent and data-informed valuation signal across thousands of VC-backed companies.” According to PitchBook, the model combines machine learning with PitchBook’s private-market data, public-market signals and capital-structure insights to determine valuations. It launches w ...

Core Viewpoint - The article discusses the recent internal rotation in the U.S. stock market, highlighting a shift from a few large-cap stocks leading the market to a broader participation across various sectors, while also addressing the impact of AI on traditional business models and the resulting market volatility [5][7][8]. Market Performance - On Tuesday, the S&P 500 fell by approximately 0.3%, while the Dow Jones Industrial Average rose by about 0.1%, reaching a new historical high [5]. - The equal-weighted S&P index also reached a record high, indicating a shift in market dynamics with around 300 stocks in the S&P 500 rising [7]. Retail Sales Data - The U.S. Commerce Department reported that December retail sales were flat month-over-month, significantly below the expected 0.4% growth, indicating a slowdown in consumer spending [9]. - Core retail sales, excluding autos and gas, even showed a decline, reflecting weakened consumer spending momentum during the holiday season [9]. Interest Rate Expectations - The weak retail data led to a rise in U.S. Treasury prices and a decline in yields, with the futures market increasing the probability of three rate cuts within the year, with two already priced in [9]. - Historical trends suggest that rate cut expectations typically support risk assets, but the current market shows a divergence where rates are falling but stocks are not rising, particularly in the tech sector [11]. AI Impact on Market Sentiment - Market participants are shifting their interpretation of AI's impact from a growth narrative to concerns about short-term disruptions, leading to a "sell first, think later" mentality [12]. - Investors are moving from an "AI is a panacea" mindset to a more pragmatic "performance realization" phase, anticipating greater differentiation between winners and losers in the market [12]. Institutional Perspectives - There is a noticeable divergence in institutional views on the tech sector, with Goldman Sachs warning about the risks of overestimating AI's growth potential and emphasizing the need for actual earnings and cash flow improvements to support tech valuations [13]. - UBS downgraded its rating on the U.S. tech sector from "overweight" to "neutral," citing key risks while still acknowledging the long-term potential of AI [14]. Wealth Management Sector - The wealth management sector has come under scrutiny following the launch of an AI tool by Altruist Corp., which automates tasks traditionally reliant on human expertise, raising concerns about the core revenue models of wealth management firms [17][18]. - The market reacted sharply, with significant declines in stocks of major wealth management firms, indicating fears about the long-term competitive structure of the industry under AI pressure [19][21]. Broader Market Reactions - The sell-off in the market has been attributed to fears that AI tools could undermine the intermediary value of insurance brokers, leading to a significant drop in the insurance brokerage sector [22]. - The recent downturn in the software sector has seen substantial market capitalization losses, with estimates indicating a combined loss of approximately $611 billion across software, financial services, and asset management sectors [26]. Conclusion - The current market environment reflects a transition from viewing AI as a beneficiary narrative to recognizing potential victims, with traditional software companies facing heightened scrutiny and volatility [27]. - The article suggests that this phase serves as a valuation and business model stress test, prompting a reevaluation of which revenue models are based on irreplaceable value versus those reliant on information asymmetry [34].

Core Viewpoint - Investors are increasingly anxious about the transformative impact of artificial intelligence (AI) on the economy, leading to significant stock market volatility [1][2]. Group 1: Market Reactions - AI startup Anthropic's release of new automation tools triggered fears of widespread business disruption, resulting in a sell-off across various stocks, including Expedia Group Inc., Salesforce Inc., and London Stock Exchange Group Plc [2]. - Despite a rebound at the end of the week, the market experienced severe losses, with 164 stocks in the software, financial services, and asset management sectors losing a total of $611 billion in market value [5][6]. - Thomson Reuters Corp.'s shares fell 20% in a week, marking their steepest decline ever, while Morningstar Inc. faced its worst week since 2009 [5]. Group 2: Industry Impact - The potential disruption from AI is expected to grow, affecting a wide range of companies across various sectors [4]. - The semiconductor-related stocks index has more than tripled since the end of 2022, indicating a significant shift in investment focus towards companies benefiting from AI advancements [7].