You can find original article here Wealthmanagement. Subscribe to our free daily Wealthmanagement newsletter. Research firm Morningstar launched the Morningstar PitchBook U.S. Modern Market Index (Modern Market 100), an index that tracks the performance of 100 of the largest companies in the U.S. across both public and private markets. The index, meant to reflect the fact that a growing share of the biggest companies today are owned by private equity, tracks 90 publicly listed firms and 10 of the largest ...

CHICAGO--(BUSINESS WIRE)--Morningstar, Inc. (Nasdaq: MORN), a leading provider of independent insights and index solutions, has introduced the Morningstar PitchBook US Modern Market 100 Index ('Modern Market 100'). With the growth of private capital markets, this new benchmark is the first to bridge public and private equity exposure in a single index. The index provides a unified framework to benchmark performance and serves as the basis for investable products. Unlike traditional benchmarks c. ...

Group 1 - The debt service coverage ratio at Storehouse Lofts was reported at 1.40x in 2024, with an occupancy rate of 87% [3] - The loan for Storehouse Lofts, a 161-unit property in Philadelphia, has been moved to special servicing after a payment default, with $28 million outstanding [6] - Average apartment rents in Philadelphia have increased by $15 year over year, but have recently decreased from a peak of $1,650 in July to $1,615 [4] Group 2 - There has been "constant turnover" at the building's 7,500-square-foot tavern, which has undergone multiple name changes and recently closed in March 2025 [4] - New deliveries in parts of Philadelphia are causing supply issues, as noted by UDR's Chief Operating Officer [5] - The property was previously known as The Fairmount at Brewerytown and was redeveloped by Spain Development Group, which sold it in 2021 [6]

Core Viewpoint - The article presents a comparative analysis of the performance of active and passive funds in China's A-share market, indicating that while over half of active equity funds outperformed passive funds in the long term, this trend has reversed in the short term, with less than 20% of active funds beating passive counterparts in the last year [1][9]. Methodology Changes - The report introduces two key adjustments in measuring the performance of active funds against passive benchmarks: switching from equal-weighted to asset-weighted calculations and adopting a buy-and-hold method to reflect the actual returns for investors [6][8]. Performance Analysis - As of the end of 2024, only 13.4% of active equity funds outperformed the asset-weighted average return of passive funds, a significant drop of 52 percentage points from 2023 [9]. - The performance of active large-cap balanced equity funds has notably declined, with only 19.2% surpassing the asset-weighted average return of passive funds in the last year, down from 50% in 2023 [11]. - Active large-cap growth equity funds saw a dramatic decrease in their victory rate to 9.7% in 2024 from 70.4% in 2023, primarily due to underperformance in sectors like technology [12]. - Active small-cap equity funds had a victory rate of 38.2% in 2024, which, while lower than 49.6% in 2023, remains the highest among the three fund categories analyzed [13]. Long-term Survival Rates - Active funds consistently demonstrate higher long-term survival rates compared to passive funds, with ten-year survival rates for active large-cap balanced and small-cap equity funds remaining below 5%, while passive funds range from 12% to 38% [14][15]. Excess Return Distribution - The distribution of ten-year excess returns shows that most surviving active funds achieved positive and significant excess returns, indicating a higher probability for investors to select successful active funds [16]. Market Characteristics - The A-share market in 2024 exhibited significant structural characteristics, with value stocks outperforming growth stocks, as evidenced by the 23.1% increase in the value index compared to a mere 6.0% rise in the growth index [9][10].

Global Fund Trends - In the first half of 2025, there was a significant turnover in the number of actively managed funds, with 3,958 new open-end funds launched, but only a net increase of 278 actively managed open-end funds. Conversely, ETFs saw a strong net growth of 1,051, with 1,264 new ETFs issued [4]. - Over $410 billion in net inflows were directed towards bond funds, which is double the amount flowing into equity funds. Meanwhile, allocation funds experienced a net outflow of approximately $20 billion [7]. Passive Investment Growth - The market share of passive investment products has steadily increased over the past decade, with the total size of global public funds growing by over 130%. As of June 30, 2025, the total management scale of passive products accounted for 43%, up from 23% ten years ago, while active products' share decreased from 77% to 57% [13]. Overseas Fund Allocation to China - There has been a noticeable recovery in the allocation ratio of overseas funds to Chinese stocks, which dropped from a peak of 11.07% in 2020 to a low of 4.79% in 2024. However, this ratio began to rise again in the second half of 2024, reaching 6.26% by the end of March 2025 [19]. - In the overseas Chinese-themed funds, passive products have surpassed active funds in scale, with passive Chinese-themed funds exceeding active funds by approximately $16 billion as of June 30, 2025 [21]. - Despite a period of net inflows from 2020 to 2022, overseas Chinese-themed funds experienced net outflows from 2023 to 2024, with total fund size decreasing from nearly $250 billion in 2021 to $175.2 billion by the end of 2024. In the first half of 2025, these funds saw a net outflow of about $2 billion, although their total size grew to $196.7 billion [23][24].

Core Viewpoint - The main challenge for AI applications in the financial industry is not the technology itself, but the internal digital transformation readiness of institutions, particularly in data governance and the deep integration of business processes [1][10]. Group 1: Current State of AI Applications and Industry Opportunities - AI is penetrating the entire process of wealth management, from customer acquisition to post-investment services, with many institutions focusing on internal efficiency improvements [9]. - AI technologies are enhancing content creation and user experience in the financial sector, with tools like digital humans and large models optimizing content consumption [9]. - The transformation driven by AI is evident in the creation of personalized recommendations based on deep analysis of customer behavior data [9][10]. Group 2: Overcoming Native Barriers in AI Applications in Finance - The low tolerance for error in the financial industry necessitates a human-in-the-loop approach, where AI serves as a tool to enhance efficiency but human oversight remains essential [13]. - Key challenges include ensuring data security, achieving high accuracy in wealth management queries, and leveraging the data-intensive nature of the financial sector for AI applications [13]. Group 3: Enhancing Investor Experience through AI - AI can effectively correct irrational investment behaviors and provide continuous support to clients, enhancing trust and emotional reassurance [15]. - As AI models evolve, they are expected to take on more tasks traditionally performed by humans, although the journey towards full automation remains lengthy [15].

Core Viewpoint - The article emphasizes the need for a fundamental transformation in investment advisory services from a "short-term return orientation" to a "lifecycle goal orientation" to better meet clients' personalized needs and enhance their long-term investment experience [2][3]. Group 1: Service Model Transformation - The key to breaking the current dilemma faced by investment advisors lies in shifting the service model to focus on long-term goals rather than short-term gains [2]. - Effective "goal planning" is identified as the foundation for this transformation, serving as a prerequisite for subsequent asset allocation and post-investment services [2]. Group 2: Practical Implementation - The upcoming online seminar aims to systematically break down practical methods for goal planning, assisting investment advisors in creating personalized solutions for clients and building long-term trust [3]. - Topics to be covered include how to establish quantifiable and prioritized financial goals for clients, core principles for fund allocation under multiple goals, and balancing clients' risk tolerance with goal achievement [6]. Group 3: Company Background - Morningstar, Inc. is recognized as one of the leading investment research institutions globally, providing financial information, analysis, and ratings for various investment products [8]. - As of December 31, 2024, Morningstar manages and advises on assets totaling approximately $338 billion across 33 global markets [8].

Core Viewpoint - The article emphasizes the need for a fundamental transformation in investment advisory services from a "short-term return orientation" to a "lifecycle goal orientation" to better meet clients' personalized needs and enhance their long-term investment experience [2][3]. Group 1: Service Model Transformation - The key to breaking the current dilemma faced by investment advisors lies in shifting the service model to focus on long-term goals rather than short-term gains [2]. - Effective "goal planning" is identified as the foundation for this transformation, serving as a prerequisite for subsequent asset allocation and post-investment services [2]. Group 2: Practical Implementation - The upcoming online seminar aims to systematically break down practical methods for goal planning, assisting investment advisors in constructing personalized solutions for clients and establishing long-term trust [3]. - The seminar will cover essential topics such as how to set quantifiable and prioritized financial goals for clients, core principles for fund allocation under multiple goals, and balancing clients' risk tolerance with goal achievement [6]. Group 3: Company Background - Morningstar, Inc. is recognized as one of the leading investment research institutions globally, providing financial information, analysis, and ratings for various investment products [8]. - As of December 31, 2024, Morningstar manages and advises on assets totaling approximately $338 billion across 33 global markets [8].

Core Insights - The article discusses the significant trends in the global public fund market, highlighting a total scale of $57.6 trillion, with the top ten management firms holding 60% of the market share [2] - It emphasizes the increasing share of passive investments, while noting that in newly issued ETFs, the number of active funds has surpassed passive ones, indicating a shift in investment strategies [2] - The article also points out the inflow of funds into stock funds, particularly in European large-cap stocks, Indian stocks, and Chinese stocks, as well as the attraction of $18.3 billion into emerging digital asset ETFs [2] Global Asset Management Trends - The upcoming event will focus on the dynamics of the global asset management industry and the strategies of overseas funds in allocating resources to the Chinese market [3][4] - The event aims to empower investment research decisions by analyzing global public fund dynamics and the latest trends in overseas fund allocations to China [4] Key Highlights - The session will cover exclusive data on global public fund issuance strategies and fund flows [8] - It will provide insights into the evolution of active and passive management funds and the dominance of ETFs [8] - The discussion will reveal new asset allocation trends based on fund flows and highlight strategic hotspots in key markets like China and the US [8]

Core Insights - Morningstar reported strong quarterly earnings with adjusted EPS of $2.40, surpassing the $2.11 estimate, and GAAP revenue of $605.1 million, slightly above the consensus of $604.57 million [1][2] - The company experienced year-over-year profitability improvements, with operating margin increasing to 20.7% despite a significant drop in free cash flow, which fell by 48.3% to $62.4 million due to higher tax payments [1][2][9] Financial Performance - Non-GAAP EPS increased by 19.4% year-over-year from $2.01 to $2.40, while GAAP EPS rose by 30.6% from $1.60 to $2.09 [2] - GAAP revenue grew by 5.8% from $571.9 million in Q2 2024 to $605.1 million in Q2 2025 [2] - Operating income improved by 15.3% year-over-year, reaching $125.1 million [2] Business Segments - The Direct Platform generated $209.2 million in revenue, up 6.2%, while the PitchBook platform saw a 9.8% increase in sales to $166.5 million [5] - The Morningstar Credit segment reported a 9.5% revenue increase to $85.0 million, driven by strong demand for credit ratings [5] - The Morningstar Wealth segment's revenue grew by 2.7%, with assets under management increasing by 13.0% to $66.8 billion [6] Strategic Focus - Morningstar is concentrating on expanding its core data and analytics offerings, scaling investment management services, and enhancing credit ratings coverage [4] - The company aims to maintain high-quality data, innovate platforms, and respond to regulatory changes to sustain growth [4] Challenges and Developments - The ESG segment, Morningstar Sustainalytics, faced a revenue decline to $27.3 million due to reduced demand and a reorganization effort [7] - Operating expenses rose by 3.8%, primarily due to increased salaries and costs associated with the ESG reorganization [8] - The company continued share repurchases and dividends, spending $112.0 million on buybacks and $19.3 million on dividends [9] Future Outlook - Management did not provide specific financial guidance but emphasized ongoing investments in platform enhancements and new data capabilities [10] - Key areas for future progress include technology innovation and expanding analytics coverage [10]