Continued commitment to U.S. markets despite policy uncertainty, concerns around market concentration, calls for better climate tools and caution around AI come to the forefront in recent conversations.

Morningstar, Inc. (NASDAQ:MORN), a leading provider of independent investment insights, today shares results from the qualitative phase of its Asset Owner Perspectives Survey. The findings were taken from interviews with 25 of the largest institutional asset owners from North America, Europe and Asia-Pacific.

These individual discussions, conducted by Morningstar Indexes and Morningstar Sustainalytics in March and April 2026, are designed to check the pulse of the global asset owner community, identifying the most challenging issues and evolving trends. The qualitative phase of the survey will inform and direct the global quantitative survey to be conducted later this year.

Lindsey Stewart – Director of Institutional Insights, Morningstar:

"Asset owners act as stewards for some of the largest pools of global capital and as fiduciaries for a wide range of beneficiaries and key stakeholders. As a result, they often find themselves on the forefront of shifts in the market environment, global investment strategy, and regulatory standards and policy. This year, we've seen plenty of changes across all of those factors, so the conversation with this cohort has brought several important issues and pressure points to the surface."

Asset owner interviews this year centered around global investment outlook, opinion on private markets, sustainable investment strategy and use of artificial intelligence (AI), among other topics. Notably:

Concentration in US markets concerning, yet necessary. Asset owners are viewing concentration risk in the Magnificent Seven stocks and the US more broadly as a major risk. Despite growing frustration with policy uncertainty and geopolitical volatility coming from the US, asset owners understand the need to continue to stay invested in this market, yet deeper diversification is required. "If you ignore it (the US market) your opportunity cost becomes enormous, particularly if you're an index manager," commented an asset owner.
Diversification and resilience in focus. In response to portfolio concentration and geopolitical risks, asset owners are increasing diversification across asset classes. This includes prioritizing inflation-linked and stable cash flow investments such as infrastructure and real estate, alongside continued expansion into private markets through private credit and private equity. As one Australian superannuation fund noted: "What works in a world of greater divergence and volatility? Diversification. You want a resilient portfolio."
AI Operating in the Backroom, Not the Boardroom. Asset owners are increasingly using AI to improve internal efficiency and productivity but remain cautious about deploying it in strategic decision-making. Risk and governance concerns continue to slow broader adoption, with most taking a measured, test-and-learn approach rather than leading from the front. "It still needs a bit of NI, or natural intelligence, to critically assess the output and make sure it doesn't contain errors," noted one asset owner.
Climate Remains Material, Just More Nuanced. Climate and broader sustainable investment priorities remain but how they are discussed is being reshaped by political and regulatory pressures. Asset owners continue to ask for better data, particularly around climate, nature and biodiversity. According to one asset owner in Continental Europe, "What we see is many US companies and banks and asset managers don't publish climate targets anymore. That doesn't necessarily mean that they have retreated from doing anything about it."

Morningstar is discussing findings from the qualitative phase of its annual survey with the media, clients and key stakeholders and is applying learnings to the questionnaire for the quantitative phase of the study, to be fielded in July and August with findings to be shared in September.

About Morningstar Indexes

Morningstar Indexes was built to keep up with the evolving needs of investors—and to be a leading-edge advocate for them. Morningstar's rich heritage as a transparent, investor-focused leader in data and research uniquely equips Morningstar Indexes to support individuals, institutions, wealth managers and advisors in navigating investment opportunities across all major asset classes, styles, and strategies. In February 2026, the acquisition of CRSP brought the CRSP Market Indexes – benchmarks for over $3 trillion in US equities – into the Morningstar Indexes family. Additionally, CRSP's Research Data Products, renowned for their academic rigor, historical depth and accuracy, further enhances Morningstar's equity research and data capabilities. This powerful combination unites two trusted sources of market insight, reinforcing a shared commitment to transparency, quality and investor-focused solutions. Please visit indexes.morningstar.com for more information.

About Morningstar Sustainalytics

Morningstar Sustainalytics is a leading sustainable investment data, research, and ratings firm that supports investors around the world with the development and implementation of responsible investment strategies. For more than 30 years, the firm has been at the forefront of developing high-quality, innovative solutions to meet the evolving needs of global investors. Today, Morningstar Sustainalytics works with hundreds of the world's leading asset managers and pension funds who incorporate sustainability information and assessments into their investment processes. The firm also works with hundreds of companies and their financial intermediaries to help them consider material sustainability factors in policies, practices, and capital projects. With 17 offices globally, Morningstar Sustainalytics has more than 1,800 staff members, including more than 850 analysts with varied multidisciplinary expertise across more than 40 industry groups. For more information, visit www.sustainalytics.com.

About Morningstar, Inc.

Morningstar, Inc. is a leading provider of independent investment insights in North America, Europe, Australia, and Asia. The Company offers an extensive line of products and services for individual investors, financial advisors, asset managers and owners, retirement plan providers and sponsors, institutional investors in the debt and private capital markets, and alliances and redistributors. Morningstar provides data and research insights on a wide range of investment offerings, including managed investment products, publicly listed companies, private capital markets, debt securities, and real-time global market data. Morningstar also offers investment management services through its investment advisory subsidiaries, with approximately $370 billion in assets under management and advisement (AUMA) as of March 31, 2026. The Company operates through wholly- or majority-owned subsidiaries in 32 countries. For more information, visit www.morningstar.com/company.

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Tim Benedict, +1 203 339-1912, tim.benedict@morningstar.com

Louis Hogan, + 44 73454 40330, louis.hogan@morningstar.com