Findings show that global asset owners increased exposure to U.S. assets and private markets while identifying generative artificial intelligence, inflation, and energy and supply chains as leading investment concerns.

Morningstar, Inc., a leading provider of independent investment insights, published its fifth annual Asset Owner Perspectives Survey.

Lindsey Stewart, director of institutional insights at Morningstar, said: “Asset owners are navigating a market increasingly shaped by artificial intelligence. They are weighing innovation opportunities against higher valuations, sector and geographic concentration, environmental and social impacts, and governance concerns among leading AI companies. At the same time, they remain committed to climate-related investment considerations and are turning to specialist data and stewardship tools to support long-term decisions.”

U.S. Markets: Asset Owners Increase Exposure Despite Policy and Geopolitical Concerns

• Despite concerns about the Trump administration (51%), regulatory uncertainty (34%) and global conflict (30%), asset owners increased U.S. exposure, supported by market resilience, AI-driven growth, and benchmark weightings.

• More asset owners (31%) increased versus decreased (24%) their exposure to U.S. assets last year, reversing the 23% increase versus 32% decrease in U.S. market investment we saw in 2025.

• Asset owners ranked rising inflation (76%), the evolving generative AI landscape (71%), and energy and supply chain crises (66%) as the three most material global investment issues. Nearly six in 10 said AI-driven energy demand could increase energy costs and inflation.

Sustainability: Near-Term Issues Take Priority

• Eighteen percent of asset owners report that ESG considerations are applied to more than 75% of their assets under management (AUM), a slight decline of two percentage points from last year but still well above 2024 levels (12%). For ESG integration, North America recorded the largest year-over-year increase, rising six percentage points from 37% in 2025 to 43% in 2026, while Europe experienced a decline from 48% to 43% over the same period.

• More than half (56%) of respondents believe environmental factors have become more material in the last year, just two percentage points lower than in 2025. Social fell from 49% to 39%, and governance from 54% to 45%, potentially subject to headline and policy risks. In governance, business ethics fell 24 points (68% to 44%), the largest year-over-year drop in the study.

• Climate transition readiness (50%), energy management (42%), and physical climate risk (30%) remain the most material environmental considerations, with AI-related environmental concerns more than doubling year-over-year (12% to 25%).

Artificial Intelligence: Investment Opportunity and Portfolio Risk

• The compounding effect of AI valuations and capital expenditures (73%), AI-driven market concentration risk (65%), and overdependence on just a few mega technology providers (63%) top the list of macro-market concerns among asset owners around AI.

• Asset owners were nearly twice as likely to report a bottom-up (38%) as a top-down (20%) approach to AI. They primarily apply AI to improve efficiency (i.e., internal workflows, information, and automated processing) through bottom-up experimentation rather than to generate investment insights, while also citing governance concerns.

Private Assets Go Public

• Asset owners expect their allocation to private markets to increase from 19% of AUM today to 23% within five years. The most ambitious targets are found in Europe, where investors expect private markets to account for 25% of AUM, compared with 21% in North America and 23% in APAC.

• Among the top three reasons for pursuing private markets, AOs cite diversification versus public markets (56%), higher expected returns (42%), and access to specific market themes like AI electrification and data transmission (29%).

• Liquidity risks (63%), transparency issues (43%), and limited availability of data (28%) are still holding back private market investment for asset owners.

Asset Owners look to data providers

• AOs are increasingly looking to data providers to help improve ESG data, with 34% of respondents asking them to do so, up from 29% last year. While still slightly behind regulators on this score (38%), data providers were the only group to gain support in the past year, with the gap narrowing by 16 percentage points.

• Confidence in regulation continued to decline, with net positive views falling from 55% to 39%. Only four percent of asset owners now view regulation as a major help, down from 28% in 2022.

• While direct engagement remains the lead method of active ownership for AOs, the proportion of AOs who see this as a top priority dropped from 39% in 2025 to 30% this year. Notably, system-level stewardship approaches like collective engagement (16% to 20%) and public policy engagement (16% to 19%) both gained ground.

Margaret Stafford, director of product management at Morningstar Indexes, said: “Asset owners are looking for data to navigate today’s most complex investment questions, particularly around AI, climate transition, and private markets. The survey suggests they are increasingly seeking forward-looking measures to support portfolio construction and risk management.”

Arnold Gast, senior director of ESG Research at Morningstar Sustainalytics, said: “The ESG conversation is evolving. Rather than viewing ESG through a separate lens, asset owners are increasingly incorporating sustainability considerations into broader portfolio allocation decisions, assessing how factors such as climate transition, governance, and AI-related impacts may influence long-term outcomes.”

The global quantitative survey, conducted by Morningstar Indexes and Morningstar Sustainalytics, included more than 500 asset owners across 11 countries in North America, Europe, and Asia-Pacific, representing more than $20 trillion in combined assets.

The respondents to the Asset Owner Perspectives survey primarily represented pension funds, insurance general accounts, outsourced chief investment officers, and family offices. The survey covered investment outlook, the financial materiality of environmental, social, and governance factors, implementation approaches, and the quality of investment data, ratings, and indexes.

Source: Morningstar Indexes