Morningstar Wealth, Managers Develop Public/Private Models

Morningstar announced that its Morningstar Wealth division is working with Apollo, Franklin Templeton and J.P. Morgan Asset Management to launch a suite of public/private model portfolios that give financial advisors a single, research-driven way to access private markets.

Objective Portfolio Construction Meets Institutional Capabilities

Morningstar Public/Private Select Series will bring together:

• Morningstar Wealth’s asset allocation, manager research, and due diligence rigor
• Public market strategies from Franklin Templeton and J.P. Morgan Asset Management
• Private market strategies from Apollo and Franklin Templeton, spanning private credit and real estate

Unlike many public/private offerings built around a single firm’s strategies, Morningstar Wealth draws on its experience in asset allocation, investment selection, and portfolio construction, with a research-led focus on investor outcomes. Morningstar Wealth is a group within Morningstar Investment Management LLC, a registered investment adviser, which works with advisors to provide investment strategies such as model portfolios and separately managed accounts (SMAs) with $370 billion in assets under management.

Kunal Kapoor, chief executive officer, Morningstar: “Morningstar is bringing independent research, disciplined asset allocation, and transparent pricing together in a single framework, so advisors can help navigate complex private markets and democratize access to them for even more investors.”

Designed for Advisors, Built for Clients

The portfolios will be constructed with ETFs and interval funds to make private markets usable in individual investor portfolios, offering:

• Six risk-based portfolios, ranging from capital preservation to aggressive growth
• Public and private exposures integrated into a single asset allocation
• Transparent, competitive pricing, including no overlay fees
• Accessible minimums, expanding access beyond traditional institutional investors

By packaging private market exposure within a diversified model, Morningstar Wealth aims to remove the burden of sourcing, sizing, and managing liquidity, allowing advisors to focus on client needs rather than portfolio construction. The initial models will include exposure to private credit and real estate through interval funds ranging approximately between 12–20% of the models’ allocation, depending on risk profile and current market opportunity.

Expanding Access with Discipline

Private markets have historically been limited to institutional investors and ultra-high-net-worth individuals. At the same time, industry demand continues to grow, with advisors increasingly seeking to incorporate private markets into mainstream portfolios.

Jenny Johnson, chief executive officer of Franklin Templeton: “When I think about why private markets matter now more than ever, it’s not just access but also focus on the long-term in a short-term world. We are living in an environment of persistent inflation and structural uncertainty. We’re excited to bring greater access to these types of solutions.”

George Gatch, chief executive officer of J.P. Morgan Asset Management: “As markets continue to test traditional investment approaches and the 60/40 portfolio evolves, advisors need access to a much broader set of investment opportunities and strong oversight. Together this group can help deliver diversified portfolios that lean on the expertise of skilled active managers to integrate public and private markets prudently.”

Jim Zelter, president of Apollo: “The next generation of model portfolios will blend public and private markets, and offer investors greater diversification, more yield, and better reflect the full breadth of the economy. These models reflect what clients are seeking, private markets as a core portfolio building block, rather than an allocation to the side.”

Addressing Implementation Challenges and Providing Transparency

The portfolios seek to help address liquidity constraints, valuation timing, and complexity. Morningstar’s approach emphasizes:

• Research-driven allocations between liquid and illiquid assets
• Rigorous due diligence and ongoing oversight
• Clear disclosure of liquidity and portfolio characteristics

Morningstar Public/Private Select Series is expected to be made available to financial advisors through leading wealth and technology platforms. All four organizations are fully committed to working as one to support shared clients, platforms, and advisors, ensuring comprehensive pre- and post-purchase support, reporting, and education.

Additional details, including final structure, specific pricing, availability, and implementation, will be announced in the coming months.

Source: Morningstar Wealth