The separately managed account industry has seen much change over the past decade or so. The total managed money universe was $4.1 trillion at year-end 2015, a 3.1% annual increase in assets, according to the Money Management Institute. While traditional SMAs saw only a slight increase in the value of assets last year, unified managed accounts (UMAs) and rep as portfolio manager (RPM) programs posted what MMI called “healthy gains” of 24.4% and 5% in assets, respectively.
Within that industry are many managers plying many different strategies, but when it comes to advisors, “they want the strategies [and] they want the simplicity of one statement” that a UMA can provide, said Tim Clift, Envestnet | PMC’s chief investment strategist and a member of the awards committee that named 17 strategies as finalists in the 12th annual SMA Managers of the Year honors (click here for a list of the finalists and a description of the process by which they, and the winners, were picked).
Beyond models-based SMA portfolios, Clift said that at Envestnet | PMC, “we’re getting a lot of demand for bond portfolio UMAs” from advisors, which he noted are “much more difficult operationally.”
One “standout” growth area in SMAs is in municipal fixed income, said Clift, since end investors and their advisors are looking for income but also “tax sensitive” investing.
That ability to meet the needs of investors through portfolios using proprietary research by a committed team, employed by an asset management firm that’s committed to the strategy, are just two of the criteria that’s used to name the SMA Managers of the Year finalists and, eventually, the winners of this year’s awards. The winners will be announced during Envestnet’s Advisor Summit May 18-20, with ThinkAdvisor editors reporting and writing — and videotaping — the event, and the winners in the July issue of Investment Advisor and throughout July on ThinkAdvisor.
So what do these 17 strategies have in common? Nathan Behan, who heads Envestnet | PMC’s fixed income team as senior vice president of investment research, said, “There’s a great lack of commonality among the managers” honored as finalists. “They’re doing something different compared with their peer group,” he reported, which is why they stand out.