Morningstar to Launch Evergreen Funds Indexes
Morningstar announced the upcoming launch of the Morningstar PitchBook U.S. Evergreen Fund Indexes, which it said will offer peer group benchmarks designed to measure the performance of nontraded semiliquid funds, such as interval funds, tender offer funds, business development companies and non-traded REITs covering asset classes with subindexes across private equity, private debt, real estate, infrastructure and multi-asset strategies. The goal is to provide investors with a view of how evergreen funds perform compared with public markets.
“Despite the rapid growth of the evergreen fund market, investors have lacked essential tools to conduct due diligence and compare performance on a consistent basis,” Sanjay Arya, head of index innovation for Morningstar Indexes, said in a statement. “With the Morningstar PitchBook U.S. Evergreen Fund Indexes, we’re addressing that gap—bringing greater transparency, comparability and rigor to one of the fastest ways for investors to gain access to private markets.”
As of midyear, U.S. evergreen funds managed approximately $450 billion in net assets, up from $250 billion in 2022, according to Morningstar. (The growing popularity of private market strategies was on display at the CAIS Summit last month.)
The index family “combines monthly and daily calculated indexes to capture the full investable universe of unlisted evergreen funds and accommodate different reporting cadences.” Components include the Morningstar PitchBook U.S. Evergreen Funds Indexes, which will provide a view of all unlisted semiliquid funds and Morningstar PitchBook U.S. Daily Evergreen Funds Indexes, which will track a smaller subset of evergreen funds reporting daily NAVs.
It’s the latest piece in Morningstar’s strategy to extend coverage to the products designed for the wealth audience, coming on the heels of the firm debuting its first batch of ratings for semiliquid funds in September.
It’s also the latest in a series of indexes Morningstar has developed for private markets, joining the Morningstar PitchBook U.S. Modern Market Index (Modern Market 100), an index that tracks the performance of 100 of the largest companies in the U.S. across both public and private markets, and the Morningstar PitchBook Unicorn 30 Index (UI30), which tracks VC-backed companies valued at $1 billion or more, including SpaceX, Open AI, Stripe and SHEIN. (Morningstar acquired Pitchbook in 2016 for $225 million.)