Envestnet Paradigm Liquid Alternatives Portfolios Provide Advisors Straightforward, Risk-based Framework For Delivering Alternative Investments
Latest White Paper Outlines Opportunities and Advantages Available to Advisors and Their Clients through Implementation of Alternative Investment Strategies
CHICAGO, Dec. 13, 2012 /PRNewswire/ -- Envestnet | PMC (PMC), the portfolio management consulting division of Envestnet, Inc. (NYSE: ENV), has released a new white paper, New Choices for New Challenges: The Case for Liquid Alternatives, to help advisors better understand how liquid alternatives can offer investors a level of diversification not readily available from more traditional asset classes, and potentially shield portfolios from the worst effects of market swings. In addition, liquid alternatives provide a range of benefits not found in traditional alternatives products, including daily liquidity, greater transparency, cost and tax efficiencies, and lower investment minimums.
Envestnet, a leading provider of innovative investment and practice management solutions for financial advisors, and PMC launched the Paradigm Liquid Alternatives Portfolios in 2012, offering advisors a straightforward framework for constructing and delivering diversified portfolios that take advantage of liquid alternatives strategies. Paradigm Liquid Alternatives Portfolios were created in response to advisors' need for more effective diversification methods to help protect client portfolios from market extremes and preserve wealth.
"With traditional asset classes becoming increasingly correlated, and therefore more vulnerable to market swings, many investors recognize they have to 'diversify harder' to achieve the portfolio protection they need," said Brandon Thomas, Chief Investment Officer at Envestnet | PMC. "We believe liquid alternatives are crucial tools for investors looking for this diversification effect – and our Paradigm approach helps advisors put these tools to work."
Unlike other liquid alternative offerings, which focus on a single strategy, Paradigm Liquid Alternatives consists of three diversified portfolio approaches—the Fixed-Income Complement, Equity Complement and Portfolio Diversifier, an all-purpose, "all-season" model designed to minimize a portfolio's overall shortfall risk. All three are specifically focused on client goals, with each portfolio employing multiple liquid alternative investment vehicles.
The portfolios are constructed using rigorous due diligence and fund selection, and a proprietary, systematic process for categorizing and evaluating specific mutual fund and ETF products based on cluster analysis of management styles. The creation of these liquid alternatives portfolios exemplifies Envestnet | PMC's commitment to empowering wealth managers with innovative portfolio solutions to meet evolving market needs.
"We do extensive research into the liquid alternatives universe and develop groups of peer products with shared objectives, which we then optimize in order to determine the best exposure for each alternatives cluster," said Thomas. "The advisor can present to a client an alternatives portfolio in full alignment with their diversification goal, either for their equity allocation, their fixed-income allocation or their overall portfolio."
A key feature of the Paradigm Liquid Alternatives Portfolios construction process is the consideration of risk not just as measured by standard deviation or overall volatility, but also the risk posed by extreme lows, such as those associated with the 2007-08 financial crisis.
Envestnet's end-to-end wealth management platform is tailored and customized to allow financial institutions and independent advisors to deliver client solutions at all asset levels. It combines powerful analytic tools, dynamic reporting utilities and other practice management applications to give advisors a scalable, streamlined and integrated solution to best manage their client outcomes and strengthen their practices.
"Clients now more than ever are looking to advisors for solutions that can meet the demands of a dramatically changed investment environment," said Bill Crager, President of Envestnet. "Our Paradigm portfolios tangibly demonstrate Envestnet's commitment to act as a partner in creating and advancing portfolio solutions that help advisors conquer complexity, respond to client needs and achieve excellence in wealth management."
Note to Editors: For a copy of New Choices for New Challenges— The Case for Liquid Alternatives Implementation, Envestnet's latest white paper about liquid alternatives, advisors can visit http://www.envestnet.com/library/whitepapers.
Envestnet, Inc. (NYSE: ENV) is a leading provider of technology-enabled wealth management solutions to investment advisors. Envestnet's Advisor Suite® software empowers advisors to better manage client outcomes and strengthen their practice. Envestnet offers advanced portfolio solutions through its Portfolio Management Consultants Group, Envestnet | PMC®. Envestnet | Tamarac provides leading rebalancing, reporting and practice management software. Envestnet | Prima provides institutional-quality research and due diligence on investment and fund managers. Envestnet | Vantage™ gives advisors an in-depth view of clients' investments, empowering them to give holistic, personalized advice.
For more information on Envestnet and/or Envestnet Paradigm Liquid Alternatives Portfolios, please visit www.envestnet.com.
Jami Schlicher, JCPR
SOURCE Envestnet, Inc.
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