Bundy: ‘Benchmarks help tell stories about markets’

Morningstar’s Ron Bundy discusses speed of trust, the challenge of indexing private markets and working to meet clients’ more thematic ‘strategic beta’ needs

Ron Bundy, president of Morningstar Indexes and Morningstar Sustainalytics
Ron Bundy


Many investment processes are designed specifically to tune out any kind of narrative – and indeed they may turn to passive strategies as part of that plan – so it is interesting to hear Ron Bundy, president of Morningstar Indexes and Morningstar Sustainalytics, identify a major function of asset-related benchmarks as a way “to tell stories about markets”.

“Morningstar is a bit unusual among index providers in that we have a strong presence with asset managers, wealth advisers and other intermediaries, and also with end-investors,” he says. “The intermediaries are often the clients of our asset managers and then the end-investors are the clients of our wealth or adviser clients. As such, we are working hard to serve all three constituents of this trifecta in surround sound, if you will.

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“We understand the use cases for indexes are different among these different elements. Asset managers, for example, look at indexes as benchmarks and use them to manage and adjust risk – and sometimes they build investment products like ETFs off of them. As for the adviser segment, sometimes they use those investment products with their clients, for sure – but they really use indexes to tell stories about markets.

“So we make sure we have a robust offering in that regard and try to help advisers make sense of markets through the indexes and the research we create. The third, most important, element are the end-investors, who are being impacted by the decisions asset managers and wealth advisers are making. We have a great relationship with them too – through Morningstar.com and our other digital properties.”

See the whole article in the July/August issue of Portfolio Adviser


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