Business
Morningstar's Global Study of Fund Disclosures Finds India and the United States Earn Top Marks While Australia Continues to Lag Amid Rising Standards
The third chapter of the biannual report incorporates two new disclosure dimensions: Sales Disclosure and ESG and Stewardship Disclosure CHICAGO, Dec. 14,
About this update from Morningstar, Inc.
[{"type":"text","content":"The third chapter of the biannual report incorporates two new disclosure dimensions: Sales Disclosure and ESG and Stewardship Disclosure\n CHICAGO, Dec. 14, 2020 /PRNewswire/ -- Morningstar, Inc. (Nasdaq: MORN), a leading provider of independent investment research, today published the third chapter of its biannual Global Investor Experience (GIE) report. The report, now in its sixth edition, assesses the experiences of mutual fund investors in 26 markets across North America, Europe, Asia, and Africa. The \"Disclosure\" chapter evaluates markets based on six key disclosure dimensions, which this year includes two new dimensions—Sales Disclosure as well as ESG and Stewardship Disclosure.\nUsing a grading scale of Top, Above Average, Average, Below Average, and Bottom, Morningstar gave Top grades to India and the United States, the two most investor-friendly markets in terms of global best practices for the disclosure of portfolio manager names, fund ownership, and compensation. Conversely, Morningstar assigned a Bottom grade to Australia, which remains the only market without regulated portfolios holdings disclosure and has yet to adapt to increasing investor expectations around ESG and Stewardship Disclosure.\n\"Led by India and the U.S., most markets around the world have made gradual progress in their disclosure practices. Six markets—Canada, Korea, Taiwan, Thailand, South Africa, and Sweden—received Above Average grades. France and the Netherlands took jumps upward, benefiting from incremental improvements across EU markets, while South Africa's grade also improved. There are some notable laggards, such as Australia, that lack industry pressure or political will to make corrective changes,\" said Christina West, director of manager research services at Morningstar and co-author of the study. \n\"We're also excited to introduce two new disclosure dimensions in this year's study: Sales Disclosure and ESG and Stewardship Disclosure. For Sales Disclosure, we considered whether financial advisors are required to disclose conflicts of interest and provide appropriate fund documentation at the point of sale. ESG and Stewardship Disclosure is also an important emerging area, and we evaluated whether a market has ESG-relevant regulation as well as a stewardship code that requires the disclosure of information to support a fund's clai...