Medalist Rating for Registered Semiliquid Managed Investments
Frequently Asked Questions
What is the objective of this Medalist Rating? % Weighting for
The Morningstar Medalist Rating for Semiliquid Funds is a % Weighting for % Weighting for Semiliquid
forward-looking tool that investors may use to identify strategies Pillar Active Funds Passive Funds Funds
with strong or weak performance potential relative to relevant Process 45 80 50
peers and against the backdrop of daily-liquid options.
Specifically, the rating aims to identify strategies that are likely to People 45 10 25
outperform relevant to a public-markets equivalent, a broad Parent 10 10 25
private index, and relevant peers. Similarly, one can use the rating
to call out potential underperformers. It's worth noting that the Medalist Rating for a traditional mutual
fund or ETF includes a strict quantitative analysis of price. When
The research supporting the rating may also help investors considering semiliquid vehicles, analysts will consider price
determine whether a strategy is suitable for their portfolio based relative to funds with similar holdings and investment objectives.
on its expected performance and risk in various market conditions. That analysis will compare, for example, how much an investor
The rating’s accompanying analysis will put the strategy in pays based on various return scenarios. This approach is similar to
historical context and compare it with peers’ vital characteristics how the team evaluates other alternatives strategies today – with
such as its expenses, manager tenure, investment style, and asset customized peer groups, rather than the category-based
size. quantitative comparison that analysts would employ for traditional
open-end strategies.
What are semiliquid managed investments?
The use of the term "semiliquid" in this methodology reflects that What is an interval fund, and how is it different from a traditional
these vehicles' intermittent liquidity is more restrictive than the mutual fund?
daily liquidity offered by mutual funds and exchange-traded funds, Interval funds are different from traditional mutual funds because
for example, but less restrictive than private capital strategies that their redemptions are limited. Traditional mutual funds may be
lock up assets for more significant stretches of time. The language bought and sold each day, and ETFs offer intraday liquidity. But
around these structures is somewhat fluid and context-dependent. interval funds offer periodic redemptions, and the funds may limit
One may see the terms “evergreen,” “perpetual capital,” and how many shares may be redeemed. The interval fund’s limited
“semiliquid” used interchangeably when discussing any funds redemptions provide an opportunity for the managers of these
that allow investors to buy in at periodic intervals, have some vehicles: They may invest a portion of the assets in private equity,
provision for intermittent liquidity, and/or have no predetermined debt, and other instruments, like leases, with the goal of earning a
end. Such terms may thus apply to heavily regulated structures higher return.
such as interval funds, tender-offer funds, and European long-term
investment funds, but also to comparatively lightly regulated Why does Morningstar want to assign Medalist Ratings to
private capital funds that are formed as limited partnerships and interval funds?
that can operate indefinitely, often referred to as "evergreen LPs." Interval funds have been growing in popularity, and the
This ratings methodology document does not apply to limited- Morningstar Medalist Rating is designed to help investors identify
partnership private capital funds. which funds, if any, have the best opportunity to outperform
traditional asset classes. The Medalist Ratings also work alongside
How is this version of the Medalist Rating different from what Morningstar's coverage and analyses to help investors understand
Morningstar would assign to a traditional mutual fund or ETF? the suitability of strategies and give clear expectations of potential
benefits and risks, costs, and limitations.
The Medalist Rating has attributes that hold true regardless of the
investment vehicle to which it is assigned. The rating examines
People, Parent, and Process to determine whether the strategy’s
management team, offering firm, and investment process provide How will investors benefit from the Medalist Ratings?
competitive advantages. The methodology also considers a Morningstar’s independent Manager Research team has more
strategy’s price, regardless of vehicle type, as cost has a critical than 35 years of experience empowering investor success through
influence on a fund’s future success. its ratings and research. The Medalist Rating will benefit investors
because the rating makes it easy to identify which strategies
Here are the pillar weights by fund investment strategy:
Morningstar’s analysts think are best positioned to be successful
© 2025 Morningstar. All Rights Reserved.
Medalist Rating for Registered Semiliquid Managed Investments Frequently Asked Questions
over the long term. Analysts have the most confidence in funds performance relative to category peers, and it’s expressed as 1 to
rated Gold, Silver, and Bronze, and serious concerns about a fund 5 stars.
rated Negative. Those in the Neutral camp have not demonstrated
an edge and are likely to deliver marketlike or peerlike returns.
In the meantime, where can I find these investments in
Morningstar’s products?
When do you expect to launch the ratings?
Interval funds and tender-offer funds reside in the closed-end fund
We expect to launch the initial ratings in third-quarter 2025.
universe, while nontraded business development companies, and
nontraded REITs are in the equity database. We have created
Which semiliquid funds will Morningstar rate first? investment lists for each investment type that Direct users may
access through these links:
We will begin with a focused set of initial Medalist Ratings for US
Interval Funds
interval funds offered by asset managers for whom we already
Tender-Offer Funds
assign a Parent rating. We are actively bringing new parent firms
under coverage, and we will be expanding our coverage universe
I see incomplete data on an interval fund in Morningstar’s
as the market evolves and investor interest grows.
database. How do I get that corrected?
How do you decide which strategies to rate? If Morningstar’s data on an interval fund is incomplete, please
In making coverage decisions, Morningstar seeks to ensure that reach out to your Morningstar contact.
users of its research have access to analysis on a broad spectrum
What are your plans to expand coverage on vehicles outside the
of vehicles that are important to them and meet their needs for
United States—for example, on ELTIFs and long-term asset
portfolio construction. Hence, Morningstar doesn’t determine
coverage strictly based on quantitative screens of investment funds?
returns, net assets, or performance history. Moreover, analyst In first-quarter 2025, Morningstar published its inaugural
teams have ample discretion in determining their coverage landscape report on evergreen ELTIFs, discussing trends in fund
universe, focusing on investment merit, investor interest, and launches, asset classes, and fee structures. The report highlighted
client demand. some key considerations for investors looking to embark on a due
diligence of these strategies and the parent companies that offer
Although these criteria can tilt coverage toward vehicles that are them. As the ELTIF and LTAF landscape grows, we will continue to
larger in terms of assets under management, analysts will cover assess these strategies on their investment merits and client
newer and/or smaller vehicles if they have merit. In addition, demand. If suitable coverage candidates emerge, we would
Morningstar frequently canvasses its analyst team, internal consider assigning Medalist Ratings to a small number of ELTIFs
consulting units, and external users of Morningstar’s research to and/or LTAFs in 2026.
identify offerings that might merit coverage. Regional coverage
committees internal to the manager research team must approve Will you be using the same methodology to rate ELTIFs and
all coverage decisions. LTAFs?
Yes, we will rely on the same criteria and framework outlined in
Where will these ratings appear in Morningstar products? our methodology document for Morningstar’s Medalist Rating for
Semiliquid Funds. Within each pillar of our analysis, we will
The Medalist Ratings will be included on Morningstar.com, in
account for any local specificities that these products may have
Morningstar Direct & Reporting Solutions, in Morningstar Direct
compared with analogous US offerings.
Advisory Suite, and in data feeds associated with select interval
funds. Interval funds currently reside in the closed-end fund
Are you planning to expand coverage to vehicles available in
universe.
the Australian market?
Are there any plans to issue Morningstar Ratings (known
Yes, we plan to extend Medalist Ratings to a selection of
informally as the “star rating”) on interval funds or other
semiliquid Australian Managed Investment Schemes in the second
semiliquid registered funds?
half of 2025, initially in the private debt and private equity asset
Given the limited number of semiliquid funds, we don’t have plans classes.
in the near term to issue star ratings to these investments.
Morningstar typically requires at least 20 peers to create a
category that would be eligible for star ratings. As a reminder, the
Morningstar Rating is a measure of past risk-adjusted
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