The Rapid Growth of Model Portfolios and What Comes Next

Third-party model portfolios had $646 billion in assets under advisement as of March 31, 2025—an increase of 62% since Morningstar last surveyed for assets in June 2023, less than two years ago. Assets have also more than doubled since Morningstar began tracking model assets in June 2021.

This growth is evidence of models’ continued popularity with financial advisors. Models allow advisors to outsource some, or all, of the investment management, granting them more time to focus on other aspects of their business, such as holistic financial planning for their clients. The scale and efficiency that models can provide have been a key driver of growth.

We dive deeper into the ever-expanding world of model portfolios in our 2025 US Model Portfolio Landscape.

BlackRock Remains the King of Model Portfolios, and It Isn’t Close

BlackRock retained its crown as the largest provider of third-party model portfolios with an eye-catching $168 billion in assets. That is double its size since we last surveyed for assets in June 2023 and more than double the next-largest competitor, Wilshire.

Strong model offerings led by portfolio manager Michael Gates and a vast network of relationships with financial advisors across wirehouses, broker/dealers, and independent registered investment advisors have contributed to BlackRock’s status as a model portfolio juggernaut.

Wilshire and Capital Group came in second and third place, notching solid 55% and 54% asset gains, respectively, since our last survey.

Like BlackRock, Capital Group also sports strong off-the-shelf model portfolios and has a broad reach with financial advisors across channels. Wilshire primarily provides custom models for broker/dealer clients. That’s where 98% of its total model assets reside.

Janus Henderson was the only new addition to the top 10 in 2025, breaking through on the back of strong growth since our last survey. While multi-asset model portfolios constitute much of the model portfolio universe, equity strategies account for much of the firm’s model assets.

Flows Show Increased Demand for Model Portfolios

Asset flows for model portfolios aren’t easy for providers to track. This is because their models are utilized across several platforms that may have varying methods and/or timelines for reporting that data to the model provider. It is far less standardized than flows data for other vehicles, like mutual funds, and there may be any number of people following a provider’s models that they don’t know of.

That said, we were able to collect flows data from several providers in our survey. Nearly $38 billion flowed into model portfolios in 2024, a steep 62% increase over 2023’s $23 billion haul. While not exhaustive, it gives an idea of models’ continued popularity.

It shouldn’t come as a surprise that BlackRock dominated the flows with a whopping $30 billion of net inflows, 13 times higher than the next-highest respondent, State Street. BlackRock’s total also eclipses its $15.5 billion of net inflows in 2023. Some notable model portfolio providers like Capital Group and Fidelity declined to provide net flows for this report.

What’s Next For Model Portfolios?

Model portfolios have become a staple for many financial advisors, but model providers aren’t standing still with their offerings in this competitive space.

We asked leading model providers what products they expect to include in their model offerings over the next 36 months, and the results are a sign of the times.

Providers overwhelmingly expect to incorporate actively managed stock and bond exchange-traded funds into their models over the next couple of years. Asset managers launched over 500 active ETFs in 2024, which was over 150 more than the prior year, according to Morningstar’s database. The first wave of off-the-shelf models was largely made up of actively managed mutual funds and/or passive ETFs, but we’re already seeing them populate models; as of March 2025, 44% of the models reported to Morningstar hold at least one active ETF. Active ETFs offer some key advantages over their mutual fund counterparts, typically charging less, which is always good for investors, and providing greater tax efficiency through the ETF wrapper.

Providers are also tapping into retail investor demand for private market exposure: A third of survey respondents indicated they expect to add interval funds to their model offerings. Semiliquid vehicles like interval funds, tender-offer funds, nontraded real estate investment trusts, and nontraded business-development companies allow to access private markets for investors who may not meet the high income requirements of traditional private assets.

BlackRock has already moved on this front, partnering with iCapital and GeoWealth in March 2025 to offer custom model portfolios that invest in private equity and credit semiliquid funds.

Semiliquid funds make private markets more accessible, but investors and advisors should keep in mind:

• Liquidity is typically only provided quarterly.
• Fees are generally higher than those for mutual funds and ETFs.
• These products can be more complex than traditional investment vehicles.

Morningstar recently debuted the Morningstar Medalist Rating for semiliquid funds to help investors in their due diligence of semiliquid products.

Are we entering a new era for model portfolios? Time will tell, but with demand still very much apparent for models, we expect model providers to continue innovating their offerings through new underlying vehicles, like active ETFs or semiliquid funds, and expanded services like custom models.