From the May 2017 issue of Investment Advisor • Subscribe!

Lucky 13? For These SMA Managers, Luck Had Nothing to Do With Their Success

The finalists for the 13th annual SMA Managers of the Year are consistent outperformers who hew to their alpha theses

The Holy Grail for investment advisors who hire outside money managers isn't merely performance but also a consistent investment process, a clear thesis for producing alpha and an ownership structure that places those managers on the same side of the table as advisors and, of course, their end clients.

These managers with skin in the game also need to be available to advisors on multiple platforms and be willing to provide some customization to end clients when it's called for. Moreover, advisors want managers who stick to their investment process and perform as advertised, regardless of where we are in a market or economic cycle.

As Tim Clift, chief investment strategist at Envestnet | PMC said, “All investment managers want to generate consistent alpha for investors, but very few actually attain this goal.” Finding those consistent, available managers is no easy task, especially in the separately managed account space.

That's why for 13 years now, Investment Advisor and its partner Envestnet | PMC have researched the SMA space and acknowledged best-in-breed SMA managers as SMA Managers of the Year.

As in the previous 12 years, a selection committee that includes executives from Envestnet | PMC and editors from Investment Advisor chooses the top managers in all the asset classes where advisors use outside managers. The committee also names an overall SMA Manager of the Year — a first among equals of the SMA managers who are winners in their categories — and has for several years also named a Strategist Manager of the Year to honor an individual firm worthy of praise for all its strategies and its excellence in working with advisors to meet client needs.

Finally, reflecting the rapid growth of impact investing among advisors and the clients they serve, an Impact Manager of the Year is chosen with input from Veris Wealth Partners, a pioneer in the impact and sustainable investing space, which partners with Envestnet.

When and Where

All the winning SMA Managers of the Year are announced in a general session at the Envestnet Advisor Summit — held in Dallas this year at the Gaylord Texan on May 3–5 — along with additional coverage of the winners on ThinkAdvisor.com and in the July issue of Investment Advisor.

This year's finalists are in the large-cap equity space, where traditionally two SMA awards are presented; the mid-, SMID and small-cap equity categories, where two winners are also announced; the international and global equity category, including ADRs, in which one winner is announced; the fixed income space, where the selection committee honors a single winner; and a specialty category that includes managers operating in a number of non-traditional or hybrid asset classes, such as REITs, MLPs and convertible or preferred securities, also with one winner, though the selection committee may choose not to make this award, as it has done in the past.

Two additional awards are given: one each in the Strategist category, which recognizes a firm that stands out in multiple asset categories and support to advisors; and an Impact award, recognizing excellence in the growing category of impact, sustainable or ESG investing.

This Year’s Finalists

U.S. Equity Large-Cap

  • ClearBridge Investments — Large-Cap Growth
  • Raub Brock Capital Management — Dividend Growth
  • Santa Barbara Asset Management — Dividend Growth
  • SKBA Capital Management — ValuePlus

U.S. Equity Small- or Mid-Cap

  • Congress Asset Management — Mid-Cap Growth
  • Fairpointe Capital — Mid-Cap Core Equity
  • Kayne Anderson Rudnick — Small-Cap Sustainable Growth
  • Tributary Capital Management — Small-Cap Equity

International or Global Equity

  • Epoch Investment Partners — Global Equity Shareholder Yield
  • Lazard Asset Management — Emerging Markets Equity
  • MFS Investment Management — Research International

Fixed Income

  • Pacific Income Advisers — Limited Duration MACS
  • RNC Genter Capital Management — Taxable, Quality Intermediate

Strategist

  • Clark Capital Management — Navigator Strategist Solutions
  • Morningstar Investment Management — Morningstar Asset Allocation Active/Passive Portfolios
  • Standard & Poor’s Investment Advisory Services — S&P Model Allocation Portfolios

Impact

  • Brown Advisory — Large-Cap Sustainable Growth
  • Trillium Asset Management — Small/Mid-Cap Core

Specialty

  • Cushing Asset Management — Cushing MLP Alpha Total Return Strategy

--- Read Torchbearers: The 2016 SMA Managers of the Year to see last year's winners. 

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