[Music] I'm Isis Julian and I'm a senior software engineer at Morning Star and I work on the intelligence engine. Morning Star is a global leader in providing investment research data and analysis and we pride ourselves in empowering investor success by serving transparent, accessible, and reliable investment information. So, with AI gaining increasing popularity nearing the end of 2022 and early 2023, with a scrappy team of just five engineers, we were able to launch our first ever AI research assistant na ...

Core Viewpoint - The presentation by Dr. Chen Peng emphasizes the importance of buy-side advisory in enhancing the investor experience and promoting the high-quality development of public funds in China, breaking down investor returns into four dimensions: excess returns (A), benchmark returns (B), investment costs (C), and behavioral losses (Gamma) [1][2]. Group 1: Market Benchmark Returns - Long-term average returns for investors are primarily derived from beta (β), which represents market benchmark returns, indicating that investors can easily obtain this return through low-cost tools like index funds [5]. - The historical stock return rate in China over the past 20 years is approximately 10%, closely resembling that of the U.S. market [6]. Group 2: Difficulty in Achieving Excess Returns - Achieving alpha (α), or excess returns through active management, is increasingly challenging due to the rising proportion of institutional investors, leading to intensified competition [9]. - Data from Morningstar indicates that the probability of active funds outperforming the index has significantly decreased in the Chinese market [9]. Group 3: Impact of Fund Costs on Investor Experience - Fund costs, both explicit and implicit, are critical factors affecting investment returns. Explicit costs include fees that are clearly disclosed, while implicit costs, such as trading fees, are often overlooked [11]. - In 2022, 320 equity funds had implicit costs exceeding 2% due to high trading costs, with an average turnover rate of 1026%, indicating frequent buying and selling that erodes investor returns [12]. Group 4: Investor Behavioral Losses - Investor behavior, such as irrational actions like "buy high, sell low," can lead to discrepancies between actual returns and fund returns, referred to as behavioral losses (Gamma) [14]. - Morningstar estimates that investment advisors can enhance client returns by 2.45% annually by optimizing investment goals and managing behaviors, thus turning Gamma from negative to positive [14].

点击视频查看峰会现场精彩回顾 5月22日，晨星（中国）2025年度投资峰会在上海成功举办。 本届峰会围绕 "智汇全球·共见未来——推动基金行业高质量发展，探索买方投顾新生态" 这一主 题，汇聚了40余位海内外行业领袖，通过5场主旨演讲、7场圆桌对话，构建起横跨理论洞察与实战 经验的思想交流平台，为中国资产管理和财富管理行业的高质量转型升级提供战略性参考。 峰会由晨星（中国）主办 ，并得到了广州投资顾问学院、嘉信理财、易方达基金、鹏华基金、基煜 基金、盈米基金、广州投资顾问产业链投资有限公司的赞助支持。峰会吸引超600人现场参会，线上 累计观看量近100万人次。 01 锚定行业发展新坐标 峰会开幕式上，晨星全球CEO Kunal Kapoor与首席财务官Michael Holt率先通过视频发表致辞。 Kunal Kapoor表示，晨星将继续以透明度、独立性与长期主义为核心，携手中国市场共建更加专 业、创新、以投资者为中心的资产管理和财富管理生态。 Michael Holt则强调，在中国资产管理和财富管理行业迈向高质量发展的背景下，晨星将持续加大对 中国市场的投入，以聚焦本土的研究、定制化的工具和专业的内容全面支 ...

Core Viewpoint - The article discusses investment opportunities in value stocks for 2025, particularly focusing on technology companies like Adobe, Alphabet, and Advanced Micro Devices, amidst a volatile market environment influenced by trade tariffs [2][4]. Group 1: Adobe Inc. (ADBE) - Adobe's business model is primarily subscription-based, with approximately 90% of its revenue coming from these services, making it less sensitive to economic cycles [5][6]. - The stock is currently trading at $417.13, which is 71% of its 52-week high, indicating it is in a bear market [8]. - Amundi has increased its holdings in Adobe by 24.7%, bringing their total position to $1.8 billion, reflecting confidence in the stock's potential [8]. Group 2: Alphabet Inc. (GOOGL) - Alphabet's shares have fallen to $166.19, representing 81% of their 52-week highs, suggesting that the worst may already be priced in [9]. - The company is diversifying beyond its core search engine and advertising business into areas like quantum computing and autonomous driving, which could provide new growth avenues [10][11]. - Analyst Ivan Feinseth considers Alphabet a Strong Buy with a valuation target of $240, indicating a potential upside of 42% from current prices [12]. Group 3: Advanced Micro Devices Inc. (AMD) - AMD's stock is currently priced at $117.17, which is 63% of its 52-week high, suggesting limited downside risk with significant upside potential [14]. - There has been a 7.9% decline in short interest over the past month, indicating a shift in sentiment among short sellers [15]. - Amundi has also increased its stake in AMD by 8%, raising their exposure to $1.7 billion, showcasing confidence in the stock's future performance [16].

Financial Performance - Morningstar's revenue increased from $227.1 million in 2005 to $2,275.1 million in 2024[42] - The company's revenue grew by 11.6% in 2024, reaching $2,275.1 million[142] - Adjusted operating income increased by 51.2% to $493.8 million in 2024[142] - Free cash flow increased by 127.5% to $448.9 million in 2024[142] - In Q1 2025, revenue increased by 7.2% to $581.9 million[145] - Adjusted operating income in Q1 2025 increased by 22.2% to $135.4 million[145] Segment Performance - Morningstar Direct Platform's revenue increased by 5.5% in 2024[113] - PitchBook's revenue increased by 12.0% in 2024[116] - Morningstar Credit's revenue increased by 35.1% in 2024[121] - Morningstar Wealth's revenue increased by 8.0% in 2024[124] - Morningstar Retirement's revenue increased by 15.0% in 2024[128] - Corporate and All Other (including Morningstar Indexes and Sustainalytics) saw revenue increase by 29.3%[131] and decrease by -0.8%[131] respectively in 2024 Market Opportunity - The global spend on financial data/analysis is a $44.3 billion market with a 6.4% year-over-year growth[52, 53] - The managed account market size is $13.8 trillion with a 20.0% year-over-year growth[55] - The global indexes industry revenue is $6.4 billion with a 12.8% year-over-year growth[55]

Core Insights - The Morningstar Investment Conference (MIC) will be held in Shanghai for the first time, focusing on the future development of China's buy-side investment advisory industry [1][4][6]. Group 1: Conference Overview - The conference will take place on May 22, 2025, at the Shangri-La Hotel in Pudong, Shanghai, with registration closing on May 20, 2025 [1]. - The event is supported by various sponsors, including the Guangzhou Investment Advisory Academy and several fund management companies [1]. Group 2: Research Findings - Morningstar will unveil its research report on the disparity in returns for Chinese public fund investors, highlighting that actual investor returns often lag behind fund performance despite the presence of high-performing funds [4]. Group 3: Conference Themes and Agenda - The conference theme is "Intelligent Global Collaboration for a Better Future," emphasizing the high-quality development of the fund industry and exploring new ecosystems for buy-side investment advisory [6][7]. - The agenda includes seven roundtable discussions and five keynote speeches, covering topics from macroeconomic trends to practical applications in asset allocation and AI empowerment [6][7]. Group 4: Featured Speakers - Notable speakers include Zhang Yumeng, Managing Director of Morningstar China, and other industry leaders from various financial institutions [9][10][11].

Group 1 - The article highlights the upcoming 2025 Investment Summit hosted by Morningstar, Inc., emphasizing the opportunity for industry leaders to engage in discussions [1] - Morningstar, Inc. is identified as a leading global investment research firm, providing services across North America, Europe, Australia, and Asia [1] - As of December 31, 2024, Morningstar managed and provided investment advice on assets totaling approximately $338 billion [1]

Group 1 - Ian Bezek has a decade of experience as a hedge fund analyst and has conducted extensive research in Latin American markets, particularly in Mexico, Colombia, and Chile [2] - The focus of Ian's research includes high-quality compounders and growth stocks available at reasonable prices in the US and other developed markets [2] - The investment group led by Ian, known as Ian's Insider Corner, offers features such as a Weekend Digest, trade alerts, and direct access to Ian for insights and updates [1] Group 2 - Morningstar's research team is highly regarded, and their reports are frequently utilized in the due diligence process by investors [1] - Pat Dorsey, a notable figure in the investment community, has been recognized for his contributions while leading Morningstar [1] - The article emphasizes the importance of thorough research and analysis in making informed investment decisions [1]

Core Viewpoint - Large institutional investors, including pension funds, are significantly reducing their exposure to U.S. dollar assets and reallocating towards European markets, driven by factors such as unpredictable Trump policies and ongoing tariff conflicts [1][2]. Group 1: Institutional Investor Behavior - Investors are experiencing a historic reduction in U.S. stock allocations, with the largest outflow of funds to Europe since 1999, as reported by Bank of America [1]. - European ETFs saw a record outflow of €2.5 billion in April, marking the highest since the beginning of 2023 [1]. - The Finnish Veritas pension fund and Danish pension funds have both reduced their U.S. stock exposure, with the latter increasing European stock investments to the highest level since 2018 [2]. Group 2: Currency and Asset Trends - There is a notable shift towards non-dollar safe-haven assets, with the euro and German bonds rising sharply, indicating a departure from traditional investment patterns [2]. - Institutional investors are actively selling dollars to buy euros, as observed by Bank of America and Deutsche Bank [2]. - The potential for a structural impact on the U.S. dollar and U.S. debt markets is highlighted, as capital flows reverse from the U.S. to other markets [3]. Group 3: Market Valuation Concerns - Concerns over high valuations in the U.S. stock market are prompting investors to question the rationale behind maintaining such premium prices, as noted by the CIO of Veritas [2]. - The California Teachers' Retirement Fund is reassessing its positions, warning of risks associated with tariff policies that could lead to significant sell-offs of U.S. debt by major trading partners [3].

Financial Data and Key Metrics Changes - In 2024, the company achieved revenue growth of 11.6%, with organic growth at 11.8%, reaching $2.275 billion for the first time [72][73] - Adjusted operating income increased from $326 million in 2023 to $494 million in 2024, representing a 51% growth in operating margin [73][84] - For Q1 2025, revenue growth was reported at 7.2%, with organic growth at 9.1%, and adjusted operating income grew by 22% [74][75] Business Line Data and Key Metrics Changes - Morningstar Direct, the largest reportable segment, grew from $700 million to $788 million, maintaining strong margins [88] - PitchBook revenue increased from $450 million in 2022 to $618 million in 2024, with margin expansion from 15.9% to 30% [89] - Morningstar Credit had a significant year, contributing meaningfully to adjusted operating income, while Morningstar Wealth improved from a negative profitability position to a neutral one [90][91] Market Data and Key Metrics Changes - The company noted a significant expansion in the institutional client base, which has grown from 750 clients at the time of the IPO to a much larger number in 2024 [39] - The private credit market is highlighted as a key growth area, with increasing demand for related services and products [47][49] Company Strategy and Development Direction - The company aims to leverage insights and AI to enhance efficiency and productivity, focusing on removing friction in client interactions [41][42] - Morningstar's strategy emphasizes building a strong balance sheet to support long-term growth and resilience against market fluctuations [34] - The company is committed to expanding its capabilities in private markets and enhancing its data offerings to meet evolving client needs [48][52] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to continue delivering growth and profitability, emphasizing the importance of a strong economic moat [76][94] - The leadership team is focused on capitalizing on market opportunities, particularly in the areas of private credit and wealth management [62][64] - The company recognizes the challenges in the Sustainalytics business and is working on restructuring its product offerings to better meet market demands [63] Other Important Information - The company celebrated its 20th anniversary as a public entity, reflecting on its growth and the benefits of being publicly traded [20][22] - A new Chief Strategy Officer was announced, indicating a commitment to strategic growth and continuity within the management team [30] Q&A Session Questions and Answers Question: What is the outlook for Morningstar's growth in the coming years? - Management indicated optimism about growth opportunities, particularly in private credit and the expansion of the institutional client base [39][47] Question: How is the company addressing challenges in the Sustainalytics business? - The company is focusing on simplifying its climate solutions and ensuring that its product suite meets market needs [63] Question: What are the key areas of investment for Morningstar moving forward? - The company plans to invest in technology and data capabilities to enhance its service offerings and drive growth [78][80]