Morningstar, Inc. (Nasdaq: MORN), a leading provider of independent investment insights, has introduced its inaugural Morningstar Medalist Ratings for Semiliquid Funds. These new forward-looking, qualitative ratings are designed to evaluate the performance potential of semiliquid strategies against their peers and traditional investment vehicles such as mutual funds and exchange-traded funds (ETFs).
Semiliquid funds, which include structures like interval funds, aim to enhance the accessibility of private markets for investors. Morningstar research indicates that these funds have experienced significant growth, increasing by over 60% since 2022. However, their unique fee structures and limited liquidity have historically presented challenges for evaluation, highlighting the necessity for independent analysis of these investment products.
Laura Lutton, global head of manager research at Morningstar, commented on the development, stating that private investments are increasingly finding their way into retail portfolios, but the complex and evolving nature of this market creates a substantial information gap for many investors. She added that the Medalist Rating for Semiliquid Funds offers a measured approach to help advisors and investors assess whether these products are appropriate additions to a diversified portfolio.
The ratings utilize Morningstar’s established five-tier scale: Gold, Silver, Bronze, Neutral, and Negative. This scale conveys Morningstar’s conviction in a strategy’s long-term potential for outperformance. The initial selection of rated funds was chosen to provide investors with a diverse cross-section of strategy types and approaches from asset managers that Morningstar has previously rated.
The first Morningstar Medalist Ratings for Semiliquid Funds include: PIMCO Flexible Credit Income (Silver), PIMCO Flexible Municipal Income (Bronze), Capital Group KKR Core Plus+ (Neutral), Capital Group KKR Multi-Sector+ (Neutral), TCW Private Asset Income (Neutral), and First Trust Alternative Opportunities (Negative). These ratings are for each fund’s cheapest share class.
Lutton noted that the initial ratings reflect varying levels of conviction for each strategy, with higher-rated strategies demonstrating strong management teams and proven experience. Conversely, the lowest rating was influenced by structural concerns that warrant further evaluation.
The methodology for the Morningstar Medalist Rating for Semiliquid Funds employs the same framework used for other managed investments, including mutual funds and ETFs. Ratings are derived from assessments of a fund’s underlying investment process, its management team, and the parent firm. The research approach and pillar weightings are adapted to address the specific characteristics of semiliquid structures, such as their liquidity constraints and potential exposure to private assets.
Morningstar has made this initial set of ratings and analysis available to all investors through a research paper titled “Morningstar’s Inaugural Medalist Ratings for Semiliquid Funds,” with a summary article also available on Morningstar.com.
Morningstar plans to expand its qualitative coverage of the semiliquid fund universe. The scope of future coverage will be determined by Morningstar’s analyst teams based on factors including investment merit, investor demand, and client interest. These ratings will be accessible on Morningstar.com and integrated into products within the Direct Platform, including Morningstar Direct, Direct Advisory Suite, and in data feeds associated with select interval funds. Additionally, Morningstar offers “Morningstar’s Guide to Semiliquid Funds,” which provides an introductory overview of the market, including how these products function, their potential role in a portfolio, and associated risks.
Morningstar, Inc. is a leading provider of independent investment insights across North America, Europe, Australia, and Asia. The company offers a wide array of products and services for individual investors, financial advisors, asset managers and owners, retirement plan providers and sponsors, institutional investors in debt and private capital markets, and alliances and redistributors. Morningstar provides data and research insights on various investment offerings, including managed investment products, publicly listed companies, private capital markets, debt securities, and real-time global market data. The company also offers investment management services through its investment advisory subsidiaries, which had approximately $352 billion in assets under management and advisement (AUMA) as of June 30, 2025. Morningstar operates through wholly-owned subsidiaries in 32 countries.
