Envestnet has announced that Envestnet|PMC, its portfolio consulting group, has launched the Quantitative Portfolios, a series of separately managed account portfolios that leverage Envestnet | Tamarac’s tax managed indexing technology to track an underlying index.
By combining the low expenses and indexing approach of an exchange-traded fund with the flexibility of a separately managed account, the Quantitative Portfolios can provide an optimized blend of cost-efficient beta exposure and potential "tax-management alpha."
Envestnet|PMC’s Quantitative Portfolios provide access to a concentrated version of a well-known market index for core market exposure, as well as optional tax management to help manage the client’s tax exposure. In addition, elements of the portfolios can be adjusted to complement a client’s other holdings or be consistent with a client’s own social convictions.
Jud Bergman, chairman and CEO, Envestnet, said: "A growing number of advisors who are embracing index-based strategies and core-satellite investing styles for their clients are simply looking for a better way to build portfolios. Envestnet|PMC now offers these solutions that are effective in that regard. These are attractive alternatives to ETFs in a separately managed account form, whose tax management and portfolio composition can easily be customized to meet each client’s needs."
The portfolios, available to advisors exclusively via the Envestnet platform, include five domestic equity portfolios (all-cap core, large-cap core, large-cap growth, large-cap value and small-cap core) and two international equity portfolios (developed markets and emerging markets).
The Quantitative Portfolio model is a concentrated portfolio consisting of as few as 60 positions that attempt to closely track the selected index, with sensitivity to turnover and rebalancing. PMC portfolio managers utilize Envestnet|Tamarac’s proprietary optimizer and quantitative risk modeling tools to construct the portfolios and manage their tax efficiency on the clients’ behalf.
Advisors can select from four separately managed-account formats, including a unified managed account (UMA), of each Quantitative Portfolio to tailor portfolio holdings and tax management to specific client needs.
Brandon Thomas, co-founder and CIO, Envestnet|PMC, said: "With these portfolios, tax management can be done proactively with the aim of reducing the impact of current tax liabilities and ultimately enhancing after-tax returns. These are attractive for high net worth investors, as well as for investors seeking to transition out of a low-cost basis portfolio in a tax-efficient manner."