At the Morningstar Investment Conference in Mumbai on Tuesday, Kunal Kapoor, CFA, and CEO of Morningstar, said 2025 had brought a meaningful realignment in global markets, but investors had shown surprising strength. “So much has been challenged and put to the test in 2025,” Kapoor said, adding that despite global pressures from inflation, fiscal imbalances, and uncertainty around artificial intelligence, markets have remained resilient and, importantly, investors have remained resilient.

Kapoor explained that the world was witnessing unusual movements in major assets, from a weakening U.S. dollar to strengthening gold and silver prices. “I am yet to come across a government in recent times that takes fiscal imbalances seriously,” he said, warning that speculative assets were also rising sharply. He noted that artificial intelligence had driven certain markets to new highs, but only in a very narrow way, with only a handful of stocks—such as the so-called Magnificent Seven in the U.S.—accounting for most of the returns.

He cautioned investors about chasing short-term trends. “Success doesn’t come from predicting market shifts,” Kapoor said. “It comes from preparing for market shifts.” He urged advisors to guide their clients through unseen risks, saying, “You have to prepare your clients for what they don’t see around the corner.”

Turning to India, Kapoor observed that the Morningstar India Index had lagged global markets this year, a reversal from recent years. “India entered 2025 with higher valuations,” he said, adding that trade conflicts with the U.S. had added pressure. Still, he described India’s investment story as quite compelling, pointing to rising global interest in sectors such as banking, industrials, and consumer goods. “Indian investors have remained very resilient,” Kapoor said, noting that inflows into mutual funds reached ₹29,000 crore in September alone.

Kapoor also highlighted the growing appeal of fixed income and gold among Indian investors. “Fixed income is of interest again, and that’s a good thing because it brings balance to portfolios,” he said. On gold, he shared a personal note: “My mother always said it was the one asset she truly trusted, and over time, her conviction has proven right.”

Finally, Kapoor pointed to the growing convergence between public and private markets. “Private markets have grown globally to more than $18 trillion in assets,” he said, adding that Morningstar was working to make semi-liquid and alternative strategies more accessible. “Portfolios in India are becoming much more sophisticated, and we want to help you navigate that change,” he said.