Morningstar reports decline in active fund performance amid market challenges
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 09 2026
0mins
Should l Buy MORN?
Source: NASDAQ.COM
Morningstar Inc's stock rose by 5.82% as it reached a 5-day high, despite the broader market decline with the Nasdaq-100 down 1.24% and the S&P 500 down 0.61%.
The company reported that only 38% of actively managed funds outperformed their passive counterparts in 2025, down from 42% in 2024, indicating challenges for active management amid increasing market competition. However, the performance of diversified emerging market funds improved significantly, with 64% surpassing passive peers, suggesting growing investment opportunities that may attract more capital inflows.
This mixed performance highlights the evolving landscape of fund management, where passive strategies are gaining traction due to lower fees, while active funds face increasing pressure to deliver superior returns.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy MORN?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on MORN
Wall Street analysts forecast MORN stock price to rise
2 Analyst Rating
2 Buy
0 Hold
0 Sell
Moderate Buy
Current: 182.310
Low
250.00
Averages
285.00
High
320.00
Current: 182.310
Low
250.00
Averages
285.00
High
320.00
About MORN
Morningstar, Inc. is a provider of independent investment insights in North America, Europe, Australia, and Asia. Its segments include Morningstar Data and Analytics, PitchBook, Morningstar Wealth, Morningstar Credit, and Morningstar Retirement. The Morningstar Data and Analytics segment provides investors comprehensive data, research and insights, and investment analysis to empower investment decision-making. The PitchBook segment provides investors with access to a broad collection of data and research covering the private capital markets. Morningstar Wealth segment brings together its model portfolios and wealth platform; practice and portfolio management software for registered investment advisers; data aggregation and enrichment capabilities; and others. Morningstar Credit segment provides investors with credit ratings, research, data, and credit analytics solutions. The Morningstar Retirement segment offers products designed to help individuals reach their retirement goals.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
PitchBook Launches Late-Stage Company Research Initiative
- New Market Analysis Area: PitchBook has launched a Late-Stage Company Research initiative focusing on the world's most influential private companies, with the first report analyzing SpaceX, providing in-depth insights into its business model and market dynamics, thereby aiding investors in understanding performance and market impact.
- IPO Activity Resurgence: After years of delays, IPO activity is regaining momentum for the first time since 2021, shifting attention back to late-stage private companies, with PitchBook's research addressing the gap in consistent, timely analysis that investors demand for transparency.
- AI Giants Evaluation Framework: The report titled 'Ranking the AI Giants' introduces PitchBook's AIBQ framework, designed to evaluate companies like Anthropic, Databricks, and OpenAI on long-term value drivers, offering a consistent, data-driven approach to assessing business quality.
- Quarterly Tracking Reports: PitchBook will publish a quarterly Unicorn Tracker highlighting trends in valuation, fundraising, and exits within the late-stage ecosystem, enabling clients to apply consistent data analysis across workflows such as deal sourcing and strategic planning.
See More
Emerging Market Debt Attracts Investors Amid Turmoil
- Significant Inflows: In 2025, investors poured $152 billion into emerging market debt exchange-traded products, significantly surpassing the $103 billion that flowed into emerging market equities, indicating a strong preference for debt amid market turmoil.
- Yield Advantage: The attractive yields of emerging market debt are drawing investors, with the Morningstar Emerging Markets Composite Bond index showing a total return of nearly 9% over the past 12 months, compared to approximately 5.8% for the Morningstar U.S. Core Bond index, highlighting the rising appeal of emerging market debt.
- Impact of Dollar Weakness: The U.S. dollar index has fallen about 7% in the past year, which lowers the servicing costs of dollar-denominated emerging market sovereign and corporate bonds, thereby increasing investor interest in this asset class.
- Regional Investment Opportunities: Investors are focusing on countries like China, Korea, and India, where inflation and fiscal risks are perceived to be lower, particularly in the context of increasing competition in artificial intelligence, suggesting new investment potential in Asian emerging markets.
See More
This Schwab Dividend ETF Shines Bright, with Defense and Energy as Key Sectors.
- Investor Expectations: Investors in the Schwab U.S. Dividend Equity ETF are not anticipating significant growth this year.
- Current Performance: Despite low expectations, the ETF is experiencing notable performance this year.
See More
Global Survey Reveals ESG Data as Core Investment Component
- Rising Demand for ESG Data: The Morningstar Sustainalytics survey reveals that 58% of the 145 financial market participants are increasingly seeking regulation-aligned datasets, highlighting a pressing need for high-quality, comparable data to support long-term value creation.
- Data Quality Challenges: The survey indicates that 41% of respondents face data quality issues, while 47% cite gaps in ESG data coverage, obstacles that could hinder effective investment decision-making and compel institutional investors to seek stronger data foundations.
- Demand for Forward-Looking Climate Metrics: 35% of respondents identify transition risk models as uniquely valuable datasets, with 73% and 68% considering ISSB disclosures and sustainable bond data essential, reflecting a growing need for predictive analytical tools.
- Challenges in Private Market Data: The survey highlights private markets as one of the most challenging areas for ESG and climate data, with 56% of participants emphasizing the need for greenhouse gas emissions data, indicating that investors require more comprehensive data integration in their sustainability pursuits.
See More
Middle East Conflict Triggers Oil Price Surge
- Oil Price Surge: The escalation of the Middle East conflict has led West Texas Intermediate futures to rise over 5% and Brent crude by about 6%, indicating heightened market concerns over supply disruptions that could exacerbate overall inflationary pressures.
- Inflationary Pressures: January's Producer Price Index (PPI) rose 0.8% above expectations, with a 12-month rate of 3.6%, suggesting that while inflation has eased, underlying price pressures remain, potentially influencing the Federal Reserve's interest rate decisions.
- Uncertain Economic Impact: Economists note that the long-term effects of rising oil prices are unclear, especially given the U.S.'s increased energy self-sufficiency, leading to expectations that the near-term economic growth and inflation downside risks are limited.
- Stagflation Risks Reemerge: With signs of labor market softening and uncertain policy outlooks, economists warn of potential stagflation risks, particularly if Middle East tensions persist, which could pressure economic recovery.
See More
AI Infrastructure Surge Drives Memory Chip Demand
- Supply-Demand Imbalance: The unprecedented demand for AI infrastructure has led to a severe shortage of memory chips, resulting in Sandisk's stock price soaring 1,290% over the past year, while Everpure faces challenges due to its heavy reliance on NAND flash memory purchases.
- Analyst Rating Discrepancy: Despite Sandisk's median target price of $725 suggesting a 12% upside, Everpure's target price of $90 implies a 36% upside, indicating that analysts generally view Everpure as the more attractive investment option.
- Profitability Comparison: Sandisk reported a staggering 404% earnings increase in Q1 2023, but its lack of competitive moat raises concerns about a potential stock price drop once supply exceeds demand; in contrast, Everpure anticipates an 18% revenue growth in fiscal 2027, showcasing stronger profitability potential.
- Market Outlook: Everpure's DirectFlash modules offer significant advantages in storage density and power consumption, and its architecture supports seamless upgrades, positioning the company to continue gaining market share, especially with potential stock price increases following NAND price stabilization.
See More
PitchBook Launches Late-Stage Company Research Initiative
- New Market Analysis Area: PitchBook has launched a Late-Stage Company Research initiative focusing on the world's most influential private companies, with the first report analyzing SpaceX, providing in-depth insights into its business model and market dynamics, thereby aiding investors in understanding performance and market impact.
- IPO Activity Resurgence: After years of delays, IPO activity is regaining momentum for the first time since 2021, shifting attention back to late-stage private companies, with PitchBook's research addressing the gap in consistent, timely analysis that investors demand for transparency.
- AI Giants Evaluation Framework: The report titled 'Ranking the AI Giants' introduces PitchBook's AIBQ framework, designed to evaluate companies like Anthropic, Databricks, and OpenAI on long-term value drivers, offering a consistent, data-driven approach to assessing business quality.
- Quarterly Tracking Reports: PitchBook will publish a quarterly Unicorn Tracker highlighting trends in valuation, fundraising, and exits within the late-stage ecosystem, enabling clients to apply consistent data analysis across workflows such as deal sourcing and strategic planning.
See More
Emerging Market Debt Attracts Investors Amid Turmoil
- Significant Inflows: In 2025, investors poured $152 billion into emerging market debt exchange-traded products, significantly surpassing the $103 billion that flowed into emerging market equities, indicating a strong preference for debt amid market turmoil.
- Yield Advantage: The attractive yields of emerging market debt are drawing investors, with the Morningstar Emerging Markets Composite Bond index showing a total return of nearly 9% over the past 12 months, compared to approximately 5.8% for the Morningstar U.S. Core Bond index, highlighting the rising appeal of emerging market debt.
- Impact of Dollar Weakness: The U.S. dollar index has fallen about 7% in the past year, which lowers the servicing costs of dollar-denominated emerging market sovereign and corporate bonds, thereby increasing investor interest in this asset class.
- Regional Investment Opportunities: Investors are focusing on countries like China, Korea, and India, where inflation and fiscal risks are perceived to be lower, particularly in the context of increasing competition in artificial intelligence, suggesting new investment potential in Asian emerging markets.
See More
This Schwab Dividend ETF Shines Bright, with Defense and Energy as Key Sectors.
- Investor Expectations: Investors in the Schwab U.S. Dividend Equity ETF are not anticipating significant growth this year.
- Current Performance: Despite low expectations, the ETF is experiencing notable performance this year.
See More
Global Survey Reveals ESG Data as Core Investment Component
- Rising Demand for ESG Data: The Morningstar Sustainalytics survey reveals that 58% of the 145 financial market participants are increasingly seeking regulation-aligned datasets, highlighting a pressing need for high-quality, comparable data to support long-term value creation.
- Data Quality Challenges: The survey indicates that 41% of respondents face data quality issues, while 47% cite gaps in ESG data coverage, obstacles that could hinder effective investment decision-making and compel institutional investors to seek stronger data foundations.
- Demand for Forward-Looking Climate Metrics: 35% of respondents identify transition risk models as uniquely valuable datasets, with 73% and 68% considering ISSB disclosures and sustainable bond data essential, reflecting a growing need for predictive analytical tools.
- Challenges in Private Market Data: The survey highlights private markets as one of the most challenging areas for ESG and climate data, with 56% of participants emphasizing the need for greenhouse gas emissions data, indicating that investors require more comprehensive data integration in their sustainability pursuits.
See More
Middle East Conflict Triggers Oil Price Surge
- Oil Price Surge: The escalation of the Middle East conflict has led West Texas Intermediate futures to rise over 5% and Brent crude by about 6%, indicating heightened market concerns over supply disruptions that could exacerbate overall inflationary pressures.
- Inflationary Pressures: January's Producer Price Index (PPI) rose 0.8% above expectations, with a 12-month rate of 3.6%, suggesting that while inflation has eased, underlying price pressures remain, potentially influencing the Federal Reserve's interest rate decisions.
- Uncertain Economic Impact: Economists note that the long-term effects of rising oil prices are unclear, especially given the U.S.'s increased energy self-sufficiency, leading to expectations that the near-term economic growth and inflation downside risks are limited.
- Stagflation Risks Reemerge: With signs of labor market softening and uncertain policy outlooks, economists warn of potential stagflation risks, particularly if Middle East tensions persist, which could pressure economic recovery.
See More
AI Infrastructure Surge Drives Memory Chip Demand
- Supply-Demand Imbalance: The unprecedented demand for AI infrastructure has led to a severe shortage of memory chips, resulting in Sandisk's stock price soaring 1,290% over the past year, while Everpure faces challenges due to its heavy reliance on NAND flash memory purchases.
- Analyst Rating Discrepancy: Despite Sandisk's median target price of $725 suggesting a 12% upside, Everpure's target price of $90 implies a 36% upside, indicating that analysts generally view Everpure as the more attractive investment option.
- Profitability Comparison: Sandisk reported a staggering 404% earnings increase in Q1 2023, but its lack of competitive moat raises concerns about a potential stock price drop once supply exceeds demand; in contrast, Everpure anticipates an 18% revenue growth in fiscal 2027, showcasing stronger profitability potential.
- Market Outlook: Everpure's DirectFlash modules offer significant advantages in storage density and power consumption, and its architecture supports seamless upgrades, positioning the company to continue gaining market share, especially with potential stock price increases following NAND price stabilization.
See More
