Key Highlights

  • Morningstar traded at $194.87 after its Public/Private Select Series was made available through Envestnet's Fund Strategist Portfolios.
  • The portfolios were built with Apollo, Franklin Templeton and J.P. Morgan Asset Management.
  • Getting products onto large adviser platforms is one of the main ways wealth-management businesses grow.
  • Financial stocks were mixed the same day, with Tradeweb Markets falling on high Treasury yields and profit-taking.

Morningstar (NASDAQ:MORN) gained on Tuesday, October 6, trading at $194.87 and standing out among financial names in the Russell 1000. The move followed news that Morningstar Wealth's Public/Private Select Series will be offered through Envestnet's Fund Strategist Portfolios.

The series was built with Apollo, Franklin Templeton (NYSE:BEN) and J.P. Morgan Asset Management. Putting those portfolios on Envestnet's platform could expose them to a much wider pool of financial advisers who use Envestnet to build and manage client accounts.

Why It Matters

Morningstar is best known for its Investment research, fund ratings and data, but it also runs a Wealth Business that manages model portfolios for advisers. Getting those products onto large distribution platforms is one of the main ways such businesses grow, because advisers tend to choose from the menus their technology providers offer.

The public-private angle is also important. Asset managers and wealth firms have been racing to bring private-market investments, such as private Credit and private equity, to individual investors who have traditionally been limited to publicly traded stocks and bonds. Partnering with large alternative and traditional managers gives Morningstar a way to participate in that trend through its portfolio construction.

Envestnet operates technology that a large number of independent and institutional advisers use for Portfolio Management and reporting, which is why investors saw the arrangement as a meaningful distribution step for Morningstar's wealth arm. For the asset managers involved, a platform of that scale offers a route to advisers' clients without having to win them over one firm at a time, while Morningstar gets to put its portfolio-building expertise in front of a far larger audience than it could reach alone.

Financials and the Wider Market

The broader market offered a supportive backdrop. The S&P 500 rose 44.98 points to a record 7,818.93, and the Nasdaq Composite closed at a record just under 27,600. The Dow Jones Industrial Average added 253.38 points to 51,521.28, and the Russell 1000, the broad gauge of US large and mid-sized companies, tracked the gains. Small caps lagged, with the Russell 2000 slipping to about 2,830.

Financial stocks were mixed. Goldman Sachs (NYSE:GS) and American Express (NYSE:AXP) edged higher, while Charles Schwab (NYSE:SCHW) and Robinhood (NASDAQ:HOOD) slipped. Tradeweb Markets (NASDAQ:TW) fell, tied to Treasury yields at multidecade highs and to profit-taking. Yields eased on the day, with the 10-year ending near 5.28, but they remain close to their highest levels since 2002. A $58 billion auction of three-year notes cleared at the highest yield since 2006.

Adviser Adoption Will Be the Key Measure

For Morningstar, the key question is how quickly advisers on Envestnet's platform adopt the Public/Private Select Series and whether that shows up in the wealth unit's asset growth. Investors will also be watching the broader appetite for private-market products among individual investors. Earnings season for financial companies kicks off on October 13, when JPMorgan Chase, Goldman Sachs, Wells Fargo and Citigroup report.