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.
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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: 184.340
Low
250.00
Averages
285.00
High
320.00
Current: 184.340
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.
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- Strategic Development Direction: The launch of the AI assistant marks a significant advancement in Morningstar's AI strategy, aimed at empowering advisors with innovative tools to elevate their insights and recommendations, further solidifying its leadership position in the investment space.
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- Optimized Sector Allocation: In 2026, the ETF allocated 20% to energy and 19% to consumer staples, with these sectors rising 27% and 15% respectively, serving as the main drivers of returns and demonstrating the fund's keen alignment with market trends.
- Value Investment Strategy: With a P/E ratio of 18, lower than Schwab's Large Cap ETF at 28, this deep value tilt strategy allows the fund to prioritize financially healthy, cash-generating companies, thus excelling in uncertain market conditions.
- Risk Control in Sector Allocation: The ETF maintains lower allocations in the four worst-performing sectors—financials, technology, consumer discretionary, and communication services—while being heavily weighted in energy and consumer staples, ensuring a competitive edge in the current market environment.
See More
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- Asset Growth: With assets exceeding $85 billion, this ETF has become the second largest dividend ETF globally, reflecting investor confidence in its stable income strategy and further solidifying its leadership position in the ETF market.
- Optimized Sector Allocation: In 2026, the ETF's allocations to energy and consumer staples are 20% and 19%, respectively, with these sectors driving returns (energy up 27%, consumer staples up 15%), showcasing its keen alignment with market trends.
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