Displaying items by tag: model portfolios

LPL Financial recently announced that it has appointed Garrett Fish as Senior Vice President and head of Model Portfolio Management to the firm’s investment research team. In this new role, Fish will lead LPL’s investment model portfolio function, leveraging his years of active portfolio management experience to guide the firm’s model management, which includes directing the investment process and communicating with advisors. Fish will also sit on the firm’s Strategic & Tactical Asset Allocation Committee, a body responsible for the multi-asset, capital market view of LPL. He comes to LPL from J.P. Morgan Asset Management, where he spent nearly two decades as an industry-recognized fund manager leading a variety of investment vehicles for institutional and wealth management. He has managed against large-cap equity, multi-asset, and sustainable mandates during his career. LPL’s Chief Investment Officer Marc Zabicki, had this to say as part of the announcement. “Garrett’s extensive active portfolio management experience, including his international purview, will deepen our investment model management capabilities for the benefit of LPL advisors and their clients. As he joins LPL’s seasoned team of research professionals, his background and experience will also be brought to bear across our entire organization as we work collectively to provide the expertise, rigorous analysis, and valued insights on which advisors and their clients can rely.”

Finsum:LPL bolstered its research team with the appointment of Garrett Fish as Head of Model Portfolio Management.

It appears that the growing adoption of model portfolios is driving inflows into municipal ETFs. In fact, this year’s inflows to muni ETFs are double the average of the last three years, with total assets sitting at $105 billion. Investors added a record $27.8 billion into muni-bond ETFs this year. Mutual funds, on the other hand, lost more than $130 billion. According to estimates by Drew Pettit, director of ETF analysis and strategy at Citigroup Inc, nearly half of the inflows came from mutual fund holders selling shares at a loss to offset gains and swapping into ETFs. The continued adoption of model portfolios by advisors should contribute to even more muni ETF growth. In an article on WealthManagement.com, it was noted that model managers such as FMR LLC’s Strategic Advisers, Wealthfornt Advisors, and Creative Planning are some of the largest holders of Vanguard and Blackrock muni ETFs. Pettit indicated that advisors like automated, off-the-shelf products which allow them to focus more on client relationships and growing their business. In a recent interview he stated that “When model portfolios get their teeth into an ETF or a group of ETFs, you start to see this stable, almost constant, drip of money coming into these products. And it’s really hard to unseat that.”

Finsum:Muni Bond ETFs saw a record $27.8 billion in inflows this year as a result of the growing adoption of model portfolios by financial advisors.

StockSnips, a firm that provides easy access to stock market news sentiment analysis, announced that it has introduced a new SPDR Sector ETF-based portfolio model that ranks sectors by leveraging its proprietary sector sentiment signal. This will be the fifth StockSnips model portfolio that aims to deliver alpha after the launch of equity-based portfolios last year. With model portfolios increasingly attracting assets and markets being impacted by social media, investor sentiment, and chatter, StockSnips believes its signal can quantify those investor sentiment trends, resulting in alpha for end investors. While most sentiment analysis uses a survey methodology, StockSnips separates signals from the noise through Micro-sentiment, focused at the individual firm level. Ravi Koka, CEO of StockSnips commented on the model, "We are excited to bring a sector ETF-based portfolio model to investment advisors and asset managers, leveraging our extensive research in transforming unstructured textual information to a valid signal, and a robust proxy for measuring investor sentiment for a sector.” Their ticker-based portfolio models have performed well so far in a volatile 2022, and they believe the back-testing results for their sector model bode well for investors as well.

Finsum:StockSnips introduced its fifth model portfolio that aims to achieve alpha through its proprietary sector sentiment signal.

According to data from the financial technology platform 55ip, a record number of financial advisors are taking advantage of tax-loss harvesting opportunities for their clients. Data from its platform revealed that across client portfolios through Q3, the 2022 YTD tax savings benefit for model portfolios of ETF and mutual funds was 2.99%. Going back to 2020, the annualized tax savings across clients in model portfolios on their platform was 2.82%. The tax savings illustrates the value of ongoing tax loss harvesting within client portfolios throughout the year, compared to those not harvested for tax losses. 55ip, which is a wholly owned subsidiary of J.P. Morgan Asset Management, offers advisors trading and rebalancing capabilities, in addition to automated, personalized, and optimized tax outcomes. Paul Gamble, Chief Executive Officer of 55ip stated “The growth of model portfolios is one of the fastest growing trends in asset and wealth management, but concerns about the tax implication of transitioning and managing client accounts have been a major barrier to broad use by advisors. Volatile markets can be emotionally and financially challenging for investors, but our data indicates they can also present potential opportunities for meaningful benefits from a tax perspective.”

Finsum:Based on data from 55ip’s platform, a record number of advisors are implementing tax loss harvesting in their clients’ model portfolios.

Any luck, model portfolios aren’t especially attention adverse. It would help since they, along with technology upgrades and direct indexing increasingly are the cat’s meow among a growing battalion of advisor practices, a recent report found, reported pegasus-one.org.

And, hey, when it comes to model portfolios, take time to peruse the instructions. That’s because, the portfolios, when used the right way, can do a good job freeing up the time of advisory firms, allowing them to dig in more on other responsibilities, according to the findings of “The Cerulli Edge ― US Advisor Edition.”

Model portfolios should give advisors more time to devote to other advanced and financial planning capabilities, Cerulli said.

Among larger advisory firms, model portfolios probably will be adopted for small client accounts with assets on the lower end of the spectrum. That way, the report said, advisors will be able to focus on clients generating nose bleed level numbers. 

A strong catalyst for model portfolio adoption will emerge from the industry’s gradual segue in the direction of a financial planning oriented service, the report stated, according to napa-net.org.