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How to Benchmark Portfolios With Both Public and Private Equities
The challenge of valuing private companies isn’t stopping investment. To improve transparency, Morningstar and PitchBook created the Modern Market 100 Index.
Key Takeaways
Companies can access substantial funding at scale without ever going public, which is encouraging some companies to stay private longer and reshaping the relevance of traditional market benchmarks.
To navigate this new landscape, investors need better tools to capture the expanding opportunity set of the investable equity universe, across both public and private companies.
The Morningstar PitchBook Modern Market 100 Index is an important first step toward redefining how we track, measure, and access the expanding scope of the US equity market.
Benchmarking your investment strategy against the appropriate index is key to understanding a portfolio's performance. But indexes generally track public companies, not private ones. And as private companies become increasingly important to the economy and to investors’ portfolios, it’s clear that standard benchmarks like the S&P 500 and Dow Jones Industrial Average are no longer able to represent the full opportunity set available to investors.
As private markets investment continues to grow, so too does the need for a reliable method of benchmarking that provides transparency and improves investor confidence. The chart below shows how private markets are accounting for a rapidly growing percentage of the US equity market.
The Evolving Composition of the US Equity Market
Source: Morningstar Indexes. Data as of June 30, 2025.
That’s why we developed the Morningstar PitchBook US Modern Market 100 Index: The first index of its kind that empowers investors to track private investments against an appropriate benchmark and fully capture the companies that are driving innovation. These tools enable increased transparency and improve investor confidence.
For everything you need to know about this index, watch the webinar.
Why the Time is Right for a Private Market Index
Private markets are booming: Over the past decade, the average time that a company has stayed private before going public has doubled, from about six years to nearly 12 years.
The main reason for staying private is funding. Companies are increasingly taking advantage of opportunities to raise a significant amount of money and, in doing so, increase their valuation before going public. Consider AI companies like OpenAI, who received $100 billion from Nvidia in the final quarter of 2025 alone, and Anthropic, who raised $40 billion in financing since its founding in 2021.
Institutional investors have been hybrid investing, or investing in both public and private markets, for years. But these massive investments are making it possible for the wealth management and retail side of the industry to get in on the action as well.
Though vehicles like semiliquid funds have made private markets more accessible, the industry is still facing challenges with private investments.
Namely, most private assets don’t have daily pricing or performance data, so it’s hard to fully understand what you’re buying. That’s where the Morningstar PitchBook US Modern Market 100 comes in. This index is an important step to helping investors approach equity investing in today’s evolving market landscape.
How the Morningstar PitchBook Modern Market 100 Index Works
To demonstrate how tapping into private markets could benefit a client, a financial advisor must be able to tell the story of private markets through scenario building and modeling. For example, what does portfolio performance look like if a client invests into early-stage startups as opposed to late-stage startups and how do the return structures change? Moreover, what will a client’s risk appetite permit?
The Morningstar PitchBook Modern Market 100 Index can help establish a foundation and benchmark of valuation throughout the investment process. By leveraging advancements in data and technology, it can capture a more comprehensive, real-time view of market behavior. The Index, which shows the performance of 100 of the largest and most influential US companies (90 public and 10 public), integrates multiple secondary market sources and calculates a single daily price for a private company that is reliable and representative of real trading values in between funding rounds.
It helps simplify diversification by combining exposure to some of the most innovative and fastest-growing private companies in the US with exposure to leading publicly traded firms. The transparent pricing, liquidity screens, and semiannual rebalancing support replicability and operational efficiency. The chart below represents the 10 largest holdings of the Modern Market 100 Index.
Top 10 holdings of the Morningstar PitchBook US Modern Market 100 Index
Source: Morningstar. Data as of Dec. 31, 2025.
Rethinking the Modern Market
The rise of private markets has fundamentally altered the structure of global capital markets. The traditional model, where companies largely relied on public markets as their primary source of growth capital, no longer represents economic reality.
The Morningstar PitchBook US Modern Market 100 Index is built for today’s evolving market landscape. For the first time, financial advisors and investors can access a single, transparent benchmark that provides exposure to both public and private pillars of the US economy.
Learn more about the Morningstar PitchBook US Modern Market 100 Index here, or watch CEO Kunal Kapoor explain it in the latest Morningstar webinar.
