As institutional and retail investors increasingly seek to balance public equities with exposure to private markets, Morningstar has introduced a new benchmark designed to capture both sides of the investment universe.
On Wednesday, the firm unveiled the Morningstar PitchBook US Modern Market 100 Index (Modern Market 100)— the first index to combine public and private equity performance in a single measure. The benchmark tracks 100 of the largest U.S. companies, comprising 90 publicly traded firms and 10 late-stage, venture-backed private companies.
Reflecting the “Modern” Market
Morningstar says the 90/10 allocation reflects today’s evolving investment landscape, where private companies such as OpenAI, Stripe, and SpaceX can remain private longer while still raising substantial capital.
“Companies don’t feel the urge to go public because they can raise a lot of capital,” said Sanjay Arya, head of innovation for index products at Morningstar. “To ignore them is to miss out on some of the fastest, most dynamic companies out there.”
Although dwarfed in size — with the U.S. public equity market valued at roughly $60 trillion compared with about $8 trillion for private equity — private companies are increasingly shaping the future economy, Arya added.
Building a New Benchmark
The creation of the Modern Market 100 has been four years in the making. Pricing private assets posed one of the biggest challenges. Morningstar worked with secondary trading platforms such as Caplight and Zanbato to aggregate transaction data and developed a rules-based methodology incorporating liquidity screens, quarterly rebalancing, and daily calculations.
The move comes as demand for alternative assets accelerates. In August, President Donald Trump signed an executive order paving the way for alternative assets to be included in U.S. 401(k) retirement plans — potentially widening access to private investments. Morningstar also noted that since 2021, crossover investors such as sovereign wealth funds, private equity firms, and hedge funds have participated in roughly 5,000 private market transactions worth $450 billion.
A Tilt Toward Growth — and Risk
The index skews toward large-cap growth companies, particularly in technology. The top public constituents include Microsoft, Nvidia, Apple, Amazon, and Meta Platforms, while the top private holdings feature SpaceX, OpenAI, xAI, and Stripe.
This concentration brings opportunity but also vulnerability. A downturn in megacap tech could weigh heavily on the index, though recent performance suggests upside potential. Over the past year, the Modern Market 100 delivered a 28.2% return, compared with a 20% gain for the S&P 500, according to a Morningstar white paper.
Capturing the Innovation Economy
Arya argues that the index offers investors a lens into the innovation economy that traditional benchmarks overlook. OpenAI, for example, is valued at around $500 billion — larger than ExxonMobil or Procter & Gamble — yet remains inaccessible to most investors.
“Benchmarks have always evolved with the economy — from railroads in the 19th century to today’s innovation-driven companies,” Arya said. “The Modern Market 100 provides a fuller picture of how market dynamics are shifting and helps investors better understand where growth is happening.”
This new index could serve as an important tool for investors seeking exposure across both public and private markets, while offering insights into the companies defining the next phase of economic growth.
