How Morningstar Asia can add value for you in 2017

More than mutual funds

Nick Cheung 09.02.2017
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At Morningstar, we are always thinking about the next big thing. It’s how we grew from a startup to a global investment research company in just 30 years. 

I’m proud to say Morningstar Asia have made the world better for investors as we’re continuing to look for new ways to help people achieve their financial goals.

Here are some of the things that you may not know we offer in Asia to help leaders in the investment industry drive stronger business results:

1. Did you know Morningstar offers global market data solutions?


Morningstar deliver fast, reliable market data and extensive histories from over 260 global exchanges, index providers, banks, and inter-dealer brokers, covering more than 18 million instruments.

Our Global Equity Fundamentals covers

  • 98% of the world’s market cap, including 100% coverage and an average of 10 years of historical data for all major US, UK, European and Australian exchanges.
  • nearly 41,000 companies globally.

Morningstar collects real-time pricing data from

  • more than 260 sources around the world, covering a wide range of equity exchanges and indexes, as well as foreign exchange and Treasury markets.

Global banks, brokerages, asset managers, media outlets and software providers rely on Morningstar Global Market Data Solutions to power their business-critical applications.

Clients have a choice of data delivered at various frequencies for more than 18 million instruments from every major exchange and index, plus foreign exchange and Treasury markets.  

2. Did you know Morningstar has a proprietary global risk model that looks into factor exposure?


The Morningstar Global Risk Model helps you identify and assess the amount of risk in your investments. By tracking a stock’s underlying economic exposure to 36 factors, including six unique to Morningstar, our model lets you quickly see how a variety of market conditions could affect a portfolio. The model can cover 44,000 stocks and 20,000 equity portfolios.

We believe our model succeeds in its distinction with the following features:

  • We use proprietary fundamentally based factors which we believe are superior drivers of returns. Morningstar’s research group provides forward looking ratings on assets that have been successful in predicting the future distribution of returns.
  • We forecast the full probability distribution of future returns with non-normal distributions. Consequently, our risk model is agnostic to any particular risk metric a user wishes to use.
  • Our model can accommodate a range of time horizons.

After launching this risk model in the summer of 2016, we are planning to launch a few software components that use the risk model data as input. In the coming quarters, we are expecting to see a Scenario Analysis component come online which allow you to answer questions like “what happens to my portfolio when Brexit occurs?”.

3. Our manager research capabilities are well-known in Asia, but did you know:


a) we have more equity analysts globally than manager research analysts?

Currently, we have around 200 equity analysts and 120 manager research analysts worldwide, producing close to 1500 equity analyst reports and 3900 manager research analyst reports.

We are essentially an independent research company, and we can:

  • Provide data and software for teams to perform manager research and selection
  • Be an extension of an in-house team to expand coverage should they not want to add headcount yet serve their customers more broadly
  • Be an independent manager research team with analyst access building suitable lineups that give compliance and regulators confidence given our global research workforce

We started building out local equity research team since 2014, and now we have over 15 analysts based in Asia, covering major indexes in Hong Kong, H-share and large cap China indexes.

In 2017, we aim to further expand the coverage to 250 names by Asian based analysts. In particular, we will be covering up to around 120 Red Chips, H-Shares, and US listed China companies.

b) our latest developments on the front of manager research:

We operate in global team that benefits from on-the-ground presence in locations that are closest to where the portfolio managers are.

Thus, Morningstar are much better focused in covering funds that clients need, or we believe have investment merits. We now cover 4000+ strategies globally, and in particular, 900+ strategies, which include Asia, European, and US managed strategies that are available for sale within UCITs and the cross-border universe. In addition, in a closed market like China, we have been ramping up our coverage: the 2017 goal is to have 150+ strategies in our ‘select list’ in China that would include our best ideas from pure bond funds to aggressive allocation and equity funds.

4. Did you know Morningstar has Indexes capabilities?

Inspired by our award-winning research and built upon transparent, rule-based methodologies, we started offering a range of indexes that track from global markets to a family of commodity indexes since 2002.

Investors use Morningstar Indexes to understand market performance. Morningstar Indexes are also licensed by institutions for creating distinct index-linked investment products, to analyze performance, or to make asset allocation decisions. Bank of Singapore, which is the first in Asia to license Morningstar Indexes, launched a portfolio based on Morningstar Exponential Technologies Moat Focus Index.

In addition, we know measuring relative investment performance is important in our industry. That’s why we rolled out Morningstar Open Indexes Project last year. We believe that investment performance measurement should be reliable, transparent and accessible. As part of the project, we are delivering our equity indexes for benchmarking purposes, for free. Our aim is to lower the cost of equity indexes and ultimately improve outcome for all investors.

In October 2016, Morningstar launched the Sustainability Index Family, an index series designed to provide a global standard for sustainable investing. The family offers exposure to companies that adhere to high standards on environmental, social, and governance (ESG) criteria. This particular index family launch fits well with the global sustainable investing initiatives that we have been pushing in the past year.

As you can see, we have some excellent 2017 initiatives to assist investors in Asia, and I look forward to serving your investment needs well for the year ahead. 





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Nick Cheung  Nick Cheung is the CEO of Morningstar Asia

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