Envestnet | PMC Unveils Gender-Focused Impact Quantitative Portfolio

Innovative Product Delivers Flexible, Transparent, and Cost-Effective Access to Portfolio of Companies Promoting Gender Diversity and Inclusion

CHICAGO—September 13, 2017—Envestnet | PMC, the Portfolio Management Consultants group of Envestnet, Inc. (NYSE: ENV), has launched the Gender Equity Large Cap Core Portfolio, a new offering in its series of Quantitative Portfolios (QPs). The product seeks to deliver competitive returns by investing in companies that are leaders in fostering gender diversity and inclusion through their business activities—and is the first in the industry to provide access to this type of impact-driven portfolio through a passively managed separately managed account (SMA) vehicle.

More information is available at http://www.investpmc.com/impact.

The Gender Equity Large Cap Core Portfolio is constructed by PMC’s Quantitative Research Group (QRG) using company-level environmental, social, and governance (ESG) data from Sustainalytics, a leading independent global provider of ESG research and ratings. QRG creates a portfolio of approximately 150 companies in the Russell 1000 Index that is designed to provide an index-based return with high gender and diversity ratings, and low controversy ratings, based on Sustainalytics’ ESG Research. The portfolio presently consists of 149 companies from across 11 industry sectors, including consumer staples, energy, financial services, healthcare, and telecommunications.

“We are proud to partner with Sustainalytics to offer a broad range of investors the opportunity to translate their investments into support for initiatives empowering women to participate fully in business and society,” said Ali Caffery, Associate Portfolio Manager at Envestnet | PMC. “The advanced evaluation methodology developed by Sustainalytics enables our Quantitative Research Group to maximize the impact that a wider array of investors can make on behalf of women inside and outside the workplace—and we can deliver the alpha generated by the portfolio in an innovative way through a low-cost, tax-efficient, and customized SMA product.”  

Sustainalytics calculates each potential portfolio investment’s gender and diversity rankings using two proprietary measures. Gender Diversity takes into consideration the gender composition of a company’s board members, as well as the company’s diversity programs and discrimination policies. Gender Impact is based on a gender lens research framework developed by Sustainalytics to identify companies that demonstrate leadership in establishing positive opportunities for women through corporate policies and programs. Sustainalytics excludes companies that produce or distribute adult entertainment, alcohol, firearms, gambling, tobacco, weapons, and other controversial products, and also seeks to minimize exposure to nuclear and thermal coal.

The quantitative research at the root of the Gender Equity Large Cap Core Portfolio gives the QP a higher overall ESG score than its Russell 1000 benchmark. An average ESG score of 60 or higher indicates a portfolio has a strong ESG focus, and the QP currently has an average ESG score of 63, while the Russell 1000’s average ESG score is 55. Meanwhile, Morgan Stanley reported earlier this year that 84 percent of women investors expressed interest in sustainable investing products that can enact a positive social impact, compared to 67 percent of male investors.

“The increasing demand for impact investment products signals that investors are looking to allocate their capital in ways that generate a positive environmental or social impact,” said Shila Wattamwar, Associate Director of Advisory Services at Sustainalytics. “By leveraging Sustainalytics’ ESG Research, PMC is supporting investors interested in pursuing an investment strategy aligned with gender issues. We are delighted to work with PMC on this exciting, innovative initiative.”

Like PMC’s other QPs, the Gender Equity Large Cap Core Portfolio is managed using tax-smart techniques and capabilities to position the portfolio for potential “tax alpha” that can add up to 60 basis points of value annually. In order to prevent overtrading, PMC weighs tax-loss harvesting opportunities—which occur when losses exceed the prescribed minimum threshold—against risk and trading costs. PMC can also manage the portfolio according to client-specific complex tax situations.

QRG developed the portfolio in partnership with Sustainalytics as well as Veris Wealth Partners, a leading impact investing wealth management firm.

“Investment portfolios with a focus on gender diversity and inclusion can help advisors facilitate greater value for their clients while potentially paving the way for more women to take on leadership roles in multiple facets of society,” said Patricia Farrar-Rivas, CEO of Veris Wealth Partners. “We will continue to work with PMC to expand the suite of sustainable and impact investing products available to investors through SMAs.”  

About Envestnet

Envestnet, Inc. (NYSE: ENV) is the leading provider of intelligent systems for wealth management and financial wellness. Envestnet’s unified technology enhances advisor productivity and strengthens the wealth management process. Envestnet empowers enterprises and advisors to more fully understand their clients and deliver better outcomes.

Envestnet enables financial advisors to better manage client outcomes and strengthen their practices. Institutional-quality research and advanced portfolio solutions are provided through Envestnet | PMC, our Portfolio Management Consultants group. Envestnet | Yodlee is a leading data aggregation and data analytics platform powering dynamic, cloud-based innovation for digital financial services. Envestnet | Tamarac provides leading rebalancing, reporting, and practice management software for advisors. Envestnet | Retirement Solutions provides an integrated platform that combines leading practice management technology, research, data aggregation and fiduciary managed account solutions.

More than 57,000 advisors and 2,900 companies including: 16 of the 20 largest U.S. banks, 39 of the 50 largest wealth management and brokerage firms, over 500 of the largest Registered Investment Advisers, and hundreds of Internet services companies, leverage Envestnet technology and services. Envestnet solutions enhance knowledge of the client, accelerate client on-boarding, improve client digital experiences, and help drive better outcomes for enterprises, advisors, and their clients.

For more information on Envestnet, please visit www.envestnet.com and follow @ENVintel.


Media Contact:
Dana Taormina
JConnelly for Envestnet | PMC
(973) 850-7305

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