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Morningstar Introduces Medalist Rating for Semiliquid Funds, Advancing Transparency in Private Markets
CHICAGO--(BUSINESS WIRE)-- Morningstar, Inc. (Nasdaq: MORN), a leading provider of independent investment insights, today introduced the Morningstar Medalist
About this update from Morningstar, Inc.
[{"type":"text","content":" CHICAGO--(BUSINESS WIRE)--\nMorningstar, Inc. (Nasdaq: MORN), a leading provider of independent investment insights, today introduced the Morningstar Medalist Rating™ for Semiliquid Funds, expanding its established Medalist Rating framework to the growing segment of semiliquid investment vehicles. As public and private markets converge and product offerings become more complex, the new rating brings greater transparency and due diligence to private markets.\n\n\"Semiliquid funds are becoming more accessible and gaining traction in the investment landscape, but their unique structures present challenges that warrant a reliable framework for evaluation,\" said Laura Lutton, Morningstar’s global head of manager research. \"Morningstar has a long track record of helping bring clarity to complex areas of the market. With this new rating, we are applying that same rigorous approach to help investors assess these strategies with confidence and make well-informed decisions.\"\n\nThis new rating expands on the Morningstar Medalist Rating – the firm’s forward-looking ratings methodology used for mutual funds and exchange-traded funds (ETFs) – to a range of vehicles with limited liquidity and/or exposure to private market assets. These include interval funds, tender-offer funds, nontraded real estate investment trusts (REITs), and nontraded business development companies (BDCs) in the United States, as well as European Long-Term Investment Funds (ELTIFs), United Kingdom Long-Term Asset Funds (LTAFs), and certain Australia-domiciled managed investment schemes. Investor interest in semiliquid structures has accelerated in recent years, with U.S. interval funds alone growing at an annualized rate of nearly 40% over the past decade through May 2024, according to Morningstar research.\n\nThe methodology is tailored to account for the distinct structures, liquidity constraints, and potential private asset exposures of semiliquid vehicles. Ratings will use Morningstar’s five-tier scale – Gold, Silver, Bronze, Neutral, and Negative – to express conviction in a strategy’s potential to outperform over the long term, while also guiding investors and selectors with insights on a strategy’s role in the portfolio, risks, and potential outcomes across varying market conditions.\n\nThe Morningstar Medalist Rating for Semiliquid Funds is designed to:\n\n\...