Morningstar to Launch Public-Private Model Portfolios With Funds From Apollo, Franklin Templeton, JPMorgan

Summary

Morningstar Wealth will launch six model portfolios combining traditional ETFs with interval funds, partnering with Apollo, Franklin Templeton and JPMorgan to add private-market exposure for financial advisors. They will be Morningstar's first models blending public and private assets, reflecting the growing role of outsourced model portfolios in wealth management.

Market Impact

The launch illustrates how private credit, private equity and private real estate are being packaged for the mass-affluent advisor channel, a structural shift as companies stay private longer and policymakers push for broader access. It also surfaces the debate over fees, liquidity and transparency that accompanies retail access to private assets. This analysis is informational and avoids any directional trading claims.

Why It Matters

It marks the migration of private-market products from institutional investors toward the roughly $8 trillion model-portfolio channel used by most fee-based advisors.

Key Points

• Apollo and Franklin Templeton will handle the private investments, while Franklin and JPMorgan will manage the public sleeves of the six portfolios.
• Model portfolios are used by more than 80% of fee-based advisors and oversee roughly $8 trillion in assets.
• Initial allocations to private credit and private real estate will come through interval funds, expected to account for roughly 12% to 20% of portfolio assets.
• Critics, including advocacy group Better Markets, warn that private assets carry higher fees, limited liquidity, and less transparency for mass-affluent investors.

Key Entities

Evidence

Model portfolios are now used by more than 80% of fee-based advisors and collectively oversee roughly $8 trillion in assets.

Supports: Supports the scale of the model-portfolio channel.

Initial allocations to private credit and private real estate will come through interval funds, and are expected to account for roughly 12% to 20% of portfolio assets, depending on risk profile and market conditions.

Supports: Supports the private-allocation sizing point.

Apollo and Franklin Templeton will handle private investments, and Franklin and JPMorgan will manage the public ones.

Supports: Supports the partnership structure in the summary.