Morningstar's wealth division is collaborating with Apollo Global Management, Franklin Templeton and J.P. Morgan Asset Management to introduce a group of portfolios intended to open private-market exposure to retail investors. The products, which the firms say will be available later this year, pair exchange-traded funds with interval funds to construct diversified allocations spanning public and private assets.
The initial portfolio models will feature private credit and real estate holdings delivered through interval funds. Morningstar indicated that those interval funds will account for approximately 12% to 20% of each model's allocation. The funds are a central component of Morningstar's approach to combining public-market liquidity with private-market exposures within a single portfolio structure.
The product line, branded as Morningstar's public/private select series, will be offered in six risk-based variants. The range of portfolios will extend from capital preservation strategies to aggressive growth allocations, providing investors with choices tied to differing risk tolerances and investment objectives.
Industry executives framed the launch as part of a broader push by Wall Street firms to broaden access to private markets, which historically have been concentrated among institutional investors and ultra high-net-worth individuals. In comments included with the announcement, Franklin Templeton CEO Jenny Johnson emphasized the rationale for private-market allocation today: "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," she said.
The firms involved will use the combination of ETFs and interval funds to make the mechanics of private-market investing available within structures designed for individual investor portfolios. Morningstar's framing points to a coordinated effort among asset managers to create products that integrate private credit and real estate exposure alongside public-market instruments.
What to watch
- How the 12% to 20% allocation to private credit and real estate via interval funds is implemented across each risk-based portfolio.
- Uptake among retail investors for products that mix ETFs and interval funds to access private-market assets.
- Positioning of the six portfolios across the spectrum from capital preservation to aggressive growth.