## Morningstar Launches Index Blending Public and Private Equity
Morningstar has created a new benchmark, the Morningstar PitchBook US Modern Market 100 Index, to reflect the growing investor interest in combining public and private market exposure. Here’s a breakdown:
- **The Index’s Composition:** The Modern Market 100 includes 100 of the largest U.S. companies, with a 90/10 split between public and venture-backed private companies.
- **Rationale:** This structure aims to capture the evolving asset landscape, where innovative companies are staying private longer and attracting significant capital.
- **Why It Matters:** The index aims to provide a more comprehensive view of the market, as private companies represent a significant portion of economic activity and innovation.
- **Key Players:** The index includes major public tech companies like Microsoft and Apple, alongside high-profile private companies such as SpaceX and OpenAI.
- **Challenges and Methodology:** Morningstar developed a rules-based process for pricing private assets, using data from secondary trading platforms and incorporating liquidity screens and regular rebalancing.
- **Performance:** The Modern Market 100 has shown strong performance, with a 1-year return of 28.2%, outperforming the S&P 500.
- **Potential Risks:** The index’s focus on growth companies, particularly in tech, could make it vulnerable to market downturns.
- **Investor Benefits:** The index offers investors exposure to a broader range of opportunities, including companies that are not yet publicly traded but are significant drivers of economic growth.
For more details, you can read the original article [here](link to the article).