CHICAGO, March 31, 2015 – Envestnet, Inc. (NYSE: ENV) has launched a new series of Factor-Enhanced Portfolios designed to combine the benefits of index-based investments with active exposure to key factors that strive to improve risk-adjusted returns compared with traditional market capitalization-weighted indexes.
The new series is part of the Quantitative Portfolios (QPs), managed by Envestnet's portfolio consulting group, Envestnet | PMC (PMC). QPs are a suite of asset class-specific investments that let advisors help clients move beyond simple index-based, or "beta," products.
"Beyond beta" products such as the QPs are a fast-growing, innovative market category that effectively combines the low cost and diversification of indexed approaches such as exchange traded funds with the control and customization benefits typically found only in "active" products through separately managed accounts. To learn more about all the Quantitative Portfolios, including the three new Large Cap, All Cap, and Small Cap Factor-Enhanced Portfolios visit: www.investpmc.com/QP.
A More "Personalized" Approach
The Factor-Enhanced Portfolios are separately managed account portfolios tracking the Envestnet Factor-Enhanced Indexes, which are subsets of major market indexes weighted using a combination of two key return drivers: momentum and value.
"Our Factor-Enhanced Portfolios raise the bar dramatically for products offering more 'personalized' approaches that also retain the benefits and appeal of indexing, including cost efficiency," said Jud Bergman, Chairman and Chief Executive Officer, Envestnet.
"Effectively capturing security characteristics that drive returns in an index structure, our new Factor-Enhanced products let advisors provide clients with an attractive new source of potential return 'beyond beta' and at lower cost than an active vehicle, strongly reinforcing the advisor's value in the investment selection process," he said. "The launch of the Factor-Enhanced Portfolios reaffirms our commitment to best-in-class investment solutions that help advisors tailor portfolio outcomes for results-driven clients."
PMC's factor-enhanced approach is based on research into hundreds of factors driving stock prices and portfolio returns identified by academic and industry researchers over the past several decades.
"Our proprietary research and indexes hone in on the most statistically significant factors to help advisors create excess returns for their clients," said Brandon Thomas, Co-Founder and Chief Investment Officer, PMC. "By actively managing exposures to these two non-market factors—momentum and value—we can construct separate account portfolios that have the potential to outperform over time."
For information about the intuition and process supporting PMC's factor investing approach, download their white paper: Envestnet Factor-Enhanced Index Series: A Systematic Approach to Capturing a Combination of Robust Factor Exposures.
PMC's Quantitative Portfolios were launched last year with the Market Series, a suite of portfolios that closely track an underlying market index, with a focus on domestic and international equity markets. Each portfolio cost-efficiently captures the index's important characteristics, while offering the opportunity for customization and greater tax efficiency. They are offered in a unified managed account sleeve as well as three separately managed account versions with varying levels of tax management services.
About Envestnet | PMC
Envestnet, Inc. (NYSE: ENV) is a leading provider of unified wealth management technology and services to investment advisors. Our open-architecture platforms unify and fortify the wealth management process, delivering unparalleled flexibility, accuracy, performance, and value. Envestnet solutions enable the transformation of wealth management into a transparent, independent, objective, and fully-aligned standard of care, and empower advisors to deliver better outcomes.
Envestnet | PMC provides independent advisors, broker-dealers, and institutional investors with the research, expertise, and investment solutions—from due diligence and comprehensive manager research to portfolio consulting and portfolio management—they need to help improve client outcomes.
CONTACT: Miles Hill