\n At the Hubbis Malaysia Wealth Management Forum 2026, Nicolas Gisbert, Head of Sales, Southeast Asia and Head of Strategic Partnerships, Asia at Morningstar Research, examined how wealth managers can take a more disciplined, transparent and fundamentally driven approach to fund selection.
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\nGisbert\u2019s presentation focused on the principles that underpin Morningstar\u2019s research framework, the growing complexity of the investment universe, and the need for fund selection processes that go beyond past performance.
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\nThe central message was that wealth managers need a clearer and more forward-looking framework for evaluating funds. As investment choice expands, client preferences become more personalised and AI reshapes the way research is consumed, selectors need to combine data, qualitative judgement, portfolio context and ongoing monitoring.\n <\/p>\n
Key Takeaways<\/p>\n
\n\tFund Selection Must Go Beyond Past Performance: Gisbert stressed that past performance does not predict future returns, making it important to assess risk-adjusted performance, active share, alpha consistency, peer rankings, qualitative factors and fees.
\n\tTransparency Remains Foundational: Morningstar\u2019s mission is built around transparency, independence and long-term focus, with research designed to show investors what sits inside investment products.
\n\tInvestment Choice Has Expanded Sharply: Morningstar now covers a broad universe spanning mutual funds, ETFs, private markets, private capital, alternatives, direct securities, ESG data, credit ratings and model portfolios.
\n\tPersonalisation Is Becoming A Structural Trend: Client preferences around exclusions, ESG, Shariah compliance and other investment constraints are becoming more important, with AI expected to make more customised portfolios possible.
\n\tFund Selection Should Follow A Defined Process: Gisbert outlined five steps: defining the universe, quantitative screening, qualitative assessment, due diligence, and portfolio integration and monitoring.
\n\tQualitative Research Remains Critical: Morningstar\u2019s Medalist Rating framework evaluates funds through three pillars: People, Process and Parent, with the aim of assessing future alpha potential.
\n\tFees Can Erode Outcomes: Gisbert highlighted fee pressure as a major industry trend, noting that costs can undermine performance if not properly assessed.
\n\tMonitoring Is As Important As Selection: Wealth managers need to track performance, risk metrics, material changes, diversification, correlation and manager changes after a fund has been selected.
\n\tAI Can Change Research Consumption: Morningstar is using trusted data, accumulated research and AI-enabled tools to help clients access and query research more efficiently.
\n\tData Quality Is The Foundation Of AI: Gisbert said AI is only useful in investment research if it is grounded in verified data and analyst-reviewed content.
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\u00a0<\/p>\n
Gisbert began by recapping Morningstar\u2019s mission: empowering investor success.<\/p>\n
He said this mission applies across the full investor spectrum, from asset owners, banks and asset managers to advisers and retail investors. Morningstar\u2019s role, he explained, is to support better decisions through research, data, analytics and tools.<\/p>\n
Three principles sit behind that work: transparency, independence and long-term focus.<\/p>\n
Transparency has been central to Morningstar since its founding more than 40 years ago. Gisbert said the firm began at a time when investors often had limited visibility into what mutual funds actually owned.<\/p>\n
He compared this to dim sum: it may taste good, but the contents are not always obvious. The financial industry, he suggested, can work in a similar way unless investors have the data and research required to look through the product.<\/p>\n
\u201cIn fund selection, the first task is to understand what is inside the wrapper,\u201d Gisbert said. \u201cTransparency is not just a principle. It is the starting point for better investment decisions.\u201d<\/p>\n
Independence is the second principle. Morningstar is a research house, not a broker or exchange-owned platform, and Gisbert said its focus is on providing objective analysis rather than selling products.<\/p>\n
The third principle is long-term focus. Morningstar\u2019s research is fundamentally driven and looks beyond short-term market noise, with analysis typically framed over a three- to five-year investment horizon.<\/p>\n
Three Forces Reshaping The Investment Landscape<\/p>\n
Gisbert then set out three forces shaping the fund selection landscape.<\/p>\n
The first is expanding investment choice. Morningstar began by focusing on mutual funds, but the investment universe now includes ETFs, private assets, private capital, private equity, alternatives, semi-liquid vehicles, direct securities and other structures. The number of products available to investors has expanded significantly, creating more opportunity but also more complexity.<\/p>\n
The second force is the data and technology revolution. Gisbert said AI is already changing how data is collected, cleaned, analysed and consumed. For Morningstar, this creates both an internal productivity opportunity and an external client-facing opportunity, especially where AI can be anchored to verified research and structured data.<\/p>\n
The third force is personalisation. Gisbert said ESG was, in many ways, one of the first building blocks of portfolio personalisation. While the intensity of the ESG trend has shifted in some markets, the underlying idea remains relevant: investors increasingly want portfolios that reflect their preferences.<\/p>\n
Those preferences may include avoiding oil and gas, alcohol, tobacco or other industries, or selecting Shariah-compliant strategies. Gisbert said AI is likely to make this kind of customisation more scalable over time.<\/p>\n
\u201cPersonalisation is not only about ESG,\u201d he said. \u201cIt is about recognising that investors have different objectives, constraints and preferences, and then building portfolios that reflect them.\u201d<\/p>\n
Morningstar\u2019s Expanding Research Universe<\/p>\n
Gisbert said Morningstar\u2019s data now forms part of the global language of investing.<\/p>\n
The firm covers a wide range of investment types and market participants, including managed investments, public companies, private companies, ESG-rated securities, DBRS credit-rated securities, ETFs, model portfolios, private market data and retirement solutions.<\/p>\n
This breadth matters because fund selection no longer happens within a narrow mutual fund universe. Wealth managers and advisers must increasingly assess products across public and private markets, active and passive strategies, liquid and semi-liquid vehicles, and conventional and sustainability-oriented mandates.<\/p>\n
Morningstar\u2019s capabilities span research and ratings, data and analytics, indexes, managed portfolios, credit ratings, private market insights and ESG research.<\/p>\n
For Gisbert, this broader ecosystem reflects the reality that investment selection is now more connected. Fund research, portfolio construction, index design, asset allocation and client advice increasingly depend on consistent data and comparable analysis.<\/p>\n
A Five-Step Fund Selection Process<\/p>\n
Gisbert then turned to Morningstar\u2019s fund selection framework, which he summarised in five steps.<\/p>\n
The first step is identification. Wealth managers must define the relevant universe by asset class, sector, region, domicile, category and other criteria. This is where the selection process begins, because a fund can only be judged properly against an appropriate peer group and investment objective.<\/p>\n
The second step is quantitative screening. This usually involves building a long list and applying scorecards based on measurable criteria. Performance may be part of that process, but Gisbert warned against relying on it too heavily.<\/p>\n
\u201cPerformance is visible, but it is not sufficient,\u201d he said. \u201cThe modern approach is to ask what other indicators can help explain quality and future potential.\u201d<\/p>\n
Alternative assessment methods can include multi-factor analysis, attribution, risk-adjusted return metrics, active share, alpha consistency, peer group comparisons, qualitative factors and fees. Each gives a different lens on whether a fund is genuinely adding value or simply benefiting from market conditions.<\/p>\n
The third step is qualitative screening. This is where Morningstar\u2019s analyst-led research becomes central. Rather than relying only on numbers, analysts assess whether the fund has the people, process and parent structure required to support future performance.<\/p>\n
The fourth step is product and operational due diligence. This includes understanding the manager, the investment process, the operational infrastructure, the risk controls and the wider interaction points around the fund.<\/p>\n
The fifth step is portfolio integration and monitoring. A fund should not be assessed in isolation. Wealth managers need to understand how it fits within a client portfolio, how it affects diversification, and whether it aligns with the client\u2019s risk profile.<\/p>\n
Looking Beyond Past Performance<\/p>\n
Gisbert emphasised that past performance should not be the dominant basis for fund selection.<\/p>\n
He said selectors should look at risk-adjusted returns, consistency of alpha generation, peer comparisons, fees, active share and qualitative factors. Active share can be particularly useful in determining whether an active manager is genuinely taking differentiated positions or closely tracking a benchmark while charging active fees.<\/p>\n
Fees were also highlighted as a key determinant of outcomes. Gisbert said fee pressure is intensifying across asset management, particularly as passive strategies and lower-cost benchmarks challenge incumbents.<\/p>\n
For end investors, costs matter because they directly reduce net returns. A strong gross return can be weakened meaningfully by excessive fees, poor structure or inefficient implementation.<\/p>\n
\u201cFees are not an administrative detail,\u201d Gisbert said. \u201cThey are part of the return equation, and they can erode the outcome the client ultimately receives.\u201d<\/p>\n
The broader message was that fund selection should combine quantitative evidence with qualitative judgement. Numbers can identify candidates, but they do not always explain whether a manager has a repeatable edge.<\/p>\n
The Morningstar Medalist Rating Framework<\/p>\n
Gisbert then explained Morningstar\u2019s Medalist Rating, the qualitative assessment used to evaluate funds on a forward-looking basis.<\/p>\n
The framework is built around three pillars: People, Process and Parent.<\/p>\n
The People pillar assesses the quality, experience, depth, continuity and alignment of the investment team. This includes the tenure of portfolio managers, the stability of the team, and whether incentives support investor outcomes.<\/p>\n
The Process pillar evaluates security selection, idea generation, valuation discipline, portfolio construction, risk management and capacity. The aim is to understand whether the manager has a repeatable investment process and the resources to execute it consistently.<\/p>\n
The Parent pillar looks at the asset management firm itself, including ownership, financial strength, organisational stability, culture, stewardship and regulatory or compliance standards.<\/p>\n
Together, these pillars support Morningstar\u2019s ratings: Gold, Silver, Bronze, Neutral and Negative. A medal rating indicates Morningstar\u2019s view that a strategy has positive alpha potential, while Neutral or Negative ratings indicate lower conviction.<\/p>\n
Gisbert explained that Gold represents the top 15% of positive alpha potential, Silver the next 35%, and Bronze the remaining 50% of positive alpha potential. The weighting of People, Process and Parent differs between active and passive strategies, with Process carrying a heavier weight for passive funds.<\/p>\n
\u201cThe rating is not simply a backward-looking performance label,\u201d Gisbert said. \u201cIt is designed to assess whether the fund is set up to generate future alpha.\u201d<\/p>\n
Due Diligence And Portfolio Fit<\/p>\n
Gisbert said fund selection should not stop once a shortlist has been created.<\/p>\n
Due diligence remains essential. Wealth managers must understand the manager\u2019s interaction points, from the chief investment officer and research analysts to risk, dealing, sales, clients and external fund relationships. This helps selectors assess whether the fund is supported by a coherent operating model and whether there are risks that may not show up in a performance screen.<\/p>\n
Portfolio fit is equally important. A selected fund must make sense within the client\u2019s wider asset allocation. Gisbert highlighted risk budgeting, portfolio look-through analysis and correlation assessment as key tools.<\/p>\n
Portfolio X-ray analysis can help advisers understand the underlying holdings and exposures inside a fund. Correlation analysis can show whether the fund genuinely improves diversification or simply adds similar risks in another form.<\/p>\n
Monitoring then needs to continue after allocation. This should include regular performance reviews, risk metric tracking, material change assessment and long-term consistency evaluation.<\/p>\n
Manager changes are particularly important. If a fund\u2019s lead portfolio manager or investment team changes materially, the original basis for selection may no longer hold.<\/p>\n
\u201cSelection is not the end of the process,\u201d Gisbert said. \u201cA fund has to keep earning its place in the portfolio.\u201d<\/p>\n
Common Pitfalls In Fund Selection<\/p>\n
Gisbert identified several recurring mistakes in fund selection.<\/p>\n
The first is chasing performance. Investors often gravitate towards funds with strong recent returns, but those returns may not persist and may reflect market conditions rather than manager skill.<\/p>\n
The second is ignoring fees. Even a well-managed fund can deliver weaker client outcomes if fee levels are not competitive or clearly justified.<\/p>\n
The third is poor diversification. Adding more funds does not necessarily create better diversification if the underlying exposures are similar.<\/p>\n
The fourth is neglecting risk assessment. Wealth managers need to understand downside risk, volatility, liquidity, concentration and the way a fund behaves across market environments.<\/p>\n
The fifth is overlooking fund manager changes. Personnel shifts, ownership changes or process changes can all affect whether a fund still fits the original investment case.<\/p>\n
These pitfalls reinforce the need for a repeatable framework rather than a selection process driven by recent returns or manager marketing.<\/p>\n
AI, Data And The Future Of Research Consumption<\/p>\n
Gisbert closed by discussing Morningstar\u2019s position in the AI revolution.<\/p>\n
He said Morningstar\u2019s advantage lies in the combination of trusted data, accumulated research and analyst-reviewed content built over more than 40 years. In his view, AI becomes more useful when it is grounded in high-quality source material rather than open-ended information retrieval.<\/p>\n
Morningstar has developed an MCP server, described as a way to connect Morningstar\u2019s universe, database and research with AI tools such as Claude, Copilot and ChatGPT. The aim is to allow users to ask questions within Morningstar\u2019s research environment and receive answers grounded in verified data.<\/p>\n
Gisbert said this is already changing client conversations. Rather than consuming research only through traditional reports or platforms, clients can increasingly query data and insights directly through AI-enabled workflows.<\/p>\n
\u201cAI is only as good as the data and research behind it,\u201d he said. \u201cThe opportunity is to make trusted research easier to access, not to replace the discipline that produced it.\u201d<\/p>\n
This has implications for fund selection. AI can help collect, process and surface information more efficiently, but the research framework still matters. Without strong data, consistent methodology and human oversight, AI can amplify weak inputs rather than improve decision-making.<\/p>\n
A More Disciplined Standard For Fund Selection<\/p>\n
Gisbert\u2019s conclusion was that fund selection is becoming more demanding.<\/p>\n
The investment universe is broader, client preferences are more specific, and technology is changing how research is delivered. At the same time, the basic requirements remain unchanged: selectors must understand the market, know the client and know the product.<\/p>\n
For wealth managers in Malaysia, the message is practical. A smarter fund selection process should begin with a defined universe, apply meaningful quantitative filters, incorporate qualitative research, complete proper due diligence, and then assess how each fund fits within the client\u2019s broader portfolio.<\/p>\n
It should also remain active after selection. Monitoring performance, risk, costs, portfolio role and manager changes is essential to ensuring that a fund continues to serve the client\u2019s objectives.<\/p>\n
Gisbert\u2019s message was that better fund selection is not about finding a single perfect metric. It is about combining transparency, independent research, long-term thinking, data quality and disciplined monitoring into one coherent process.<\/p>\n
\u201cGood fund selection is fundamentally about improving investor outcomes,\u201d he said. \u201cThat requires more than looking at what performed well last year. It requires understanding what is inside the fund, why it belongs in the portfolio, and whether it continues to do the job.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"At the Hubbis Malaysia Wealth Management Forum 2026, Nicolas Gisbert, Head of Sales, Southeast Asia and Head of…\n","protected":false},"author":2,"featured_media":728062,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[219760,219764,219772,219768,219759,219763,219771,219767,219761,219765,219773,219769,219758,219762,219770,219766,64,63,99,18608,186,184,185,1542],"class_list":["post-728061","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-asia-private-banking","tag-asia-private-banking-news","tag-asia-private-banking-online-training","tag-asia-private-banking-training","tag-asia-wealth-management","tag-asia-wealth-management-news","tag-asia-wealth-management-online-training","tag-asia-wealth-management-training","tag-asian-private-banking","tag-asian-private-banking-news","tag-asian-private-banking-online-training","tag-asian-private-banking-training","tag-asian-wealth-management","tag-asian-wealth-management-news","tag-asian-wealth-management-online-training","tag-asian-wealth-management-training","tag-au","tag-australia","tag-business","tag-e-learning","tag-finance","tag-personal-finance","tag-personalfinance","tag-training"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/728061","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=728061"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/728061\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/728062"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=728061"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=728061"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=728061"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}