Envestnet | PMC has launched the Gender Equity Large Cap Core Portfolio, a new offering in its series of Quantitative Portfolios (QPs).
The separately managed account (SMA) vehicle seeks competitive returns by investing in companies that are leaders in fostering gender diversity and inclusion. The impact-driven passive portfolio is constructed by PMC’s Quantitative Research Group using company-level environmental, social, and governance (ESG) data from Sustainalytics, a leading independent global provider of ESG research and ratings.
It consists of of approximately 150 companies in the Russell 1000 Index designed to provide an index-based return with high gender and diversity ratings, and low controversy ratings, based on Sustainalytics’ ESG Research. The current portfolio has 149 companies from across 11 industry sectors, including consumer staples, energy, financial services, healthcare, and telecommunications.
“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,” said Ali Caffery, associate portfolio manager at Envestnet | PMC, in a statement.
Sustainalytics calculates each potential investment’s gender and diversity rankings using two proprietary measures: Gender Diversity, which considers the gender composition of a company’s board members, as well as the company’s diversity programs and discrimination policies; and Gender Impact, based on a gender lens research framework 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 QP of the Gender Equity Large Cap Core Portfolio has an average ESG score of 63 compared to 55 for the Russell 1000 ESG average. (An average ESG score of 60 or higher indicates a portfolio has a strong ESG focus.)
Like Envestnet | 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.” In order to prevent overtrading, PMC weighs tax-loss harvesting opportunities against risk and trading costs and can manage the portfolio according to client-specific complex tax situations.
AlphaCore Launches Fund to Make Statistical Arbitrage Readily Accessible to the Public
AlphaCore Capital launched the AlphaCore Statistical Arbitrage Fund, a daily liquid mutual fund that provides exposure to a statistical arbitrage strategy.
According to AlphaCore, such strategies have historically only been available in less liquid investment structures. AlphaCore can now deliver statistical arbitrage in a mutual fund.
Statistical arbitrage is rooted in mathematics to deliver alpha independent of traditional risk factors. This quantitative strategy commonly demonstrates several attractive attributes: it is historically non-correlated to most other investment strategies and asset classes and it has a multiple model approach that looks at relationship timeframes in a matter of hours to weeks to longer. The strategy is managed by the Clinton Group, Inc.
Dynamic Wealth Advisors Adopts BasisCode Compliance Software Platform
Dynamic Wealth Advisors implemented BasisCode Compliance’s software platform to improve compliance management for its own RIAs and the independent RIAs for whom it provides back office services.
The BasisCode compliance software platform will be integrated with Dynamic Wealth Advisors’ Wealth360 platform, including Orion Advisor Services’ portfolio accounting solution. BasisCode Compliance’s software simplifies and centralizes compliance management, ranging from compliance testing and risk assessment to trading surveillance, insider trading and staff certifications.
Dynamic Wealth Advisors implemented BasisCode Compliance’s Essentials, a core compliance management software suite that helps manage the risk lifecycle from identification to resolution. Essentials offers a basic set of management tools that simplifies management of the core elements of a compliance program and is ideally suited for organizations with simpler compliance management needs.
The cloud-based system includes testing and certifications, risk assessment, gifts and entertainment, whistleblower, document portal, robust reporting and a portal for ease of use and seamless interaction with employees.
BlueStar Indexes and Aperio Launch Israel Exposure Tilt Strategy
Aperio Group and BlueStar Indexes launched a new investment strategy designed to overweight public companies that have a strong connection to the Israeli economy.
BlueStar’s Israel Exposure Universe features more than 350 leading global multinationals—such as Intel, Apple, Cisco, Nestle, Mylan, HP, Berkshire Hathaway and Singapore Telecoms—and represents a broad cross-section of companies in diverse sectors, from information technology to health care, financials, and consumer discretionary/staples.
BlueStar has identified these companies as having a major or material presence in Israel’s economy and/or participating in Israel’s technological dynamism. Approximately 70% of the companies are American, 25% developed international (mostly from Europe), and 5% from emerging markets.
Aperio’s Israel Exposure Strategy is designed to track a broad global, international or domestic equity market benchmark, depending on a client’s preference. Investors can further customize the strategy to reflect additional ESG/SRI values, focus on harvesting tax losses, and/or tilt the portfolio toward factors such as high quality, low volatility or momentum.
—Read last week’s portfolio roundup here UBS Launches Products Tied to UN Development Goals: Portfolio Products