Semiliquid Funds Are Due for Diligence

As public and private markets increasingly converge, asset managers are bringing more complex investment vehicles—such as interval funds and other semiliquid strategies—to retail investors. While these products promise access to less-liquid asset classes beyond the reach of traditional mutual funds and ETFs, they also introduce higher fees, greater opacity, and structural complexity.

To help investors and advisors navigate this fast-growing segment, Morningstar has launched the Morningstar Medalist Rating for Semiliquid Funds, a forward-looking framework designed to evaluate whether these strategies are likely to deliver meaningful diversification or return advantages relative to public-market alternatives. As interval fund assets approach $100 billion and continue to grow rapidly under the regulatory framework of the U.S. Securities and Exchange Commission, this new tool aims to bring greater clarity to a market where costs, liquidity constraints, and risks are often difficult to discern.