The Morningstar Index in Evaluating the Performance of Unicorn Companies: A Comparative Study Between China and the United States

Abstract

The rapid rise of unicorn companies has reshaped global markets, with China and the United States emerging as dominant players in this high-valuation startup ecosystem. This study aims to conduct a comparative analysis of the Morningstar PitchBook China Unicorn 50 GR USD Index and the Morningstar PitchBook US Unicorn GR USD Index, focusing on investment performance, risk exposure, and sectoral diversification. These two economies were selected due to their significant share of the global unicorn landscape and their contrasting regulatory and economic environments. The research examines data up to December 31, 2024, using financial metrics such as annual returns, risk-adjusted performance (Sharpe ratio), and sectoral composition to assess investment attractiveness. The study relies on structured financial databases, statistical modeling, and comparative risk assessment to analyze the volatility and resilience of unicorn markets. The findings confirm that the US Unicorn Index consistently outperforms its Chinese counterpart in terms of long-term stability, higher risk-adjusted returns, and diversified sectoral exposure, particularly in artificial intelligence, fintech, and healthcare. Conversely, Chinese unicorns demonstrate higher volatility and regulatory-driven risks, with concentrated investments in fintech and communications. The study highlights the strategic importance of investment diversification, regulatory stability, and sectoral balance in sustaining unicorn growth. The results offer practical insights for investors, policymakers, and venture capital firms in optimizing unicorn investments.