When Horizon Investments won Envestnet’s overall Asset Manager of the Year award in 2018, it wasn’t only because the firm had strong performance.
The group was the “most compelling” in “leading the charge in goal-based investing solutions, and we really think that the market is moving more toward goal-based investing. We were celebrating [CEO Robbie Cannon] as a pioneer,” says Tim Clift, chief investment strategist for Envestnet.
Cannon and his team also won the award in the Strategist category, the fastest growing space on the Envestnet platform in number of strategies. The category differs from the six other awards due to its use of multi-model portfolio managers and inclusion of ETFs or mutual funds rather than individual stocks or bonds.
This year’s 15th-annual Envestnet & Investment Advisor Asset Manager Awards, will be presented in Austin, Texas, during the firm’s annual Envestnet Advisor Summit on May 1. The conference showcases the firm’s software and platform to some 2,000 attendees, and it includes awards presentation to the top asset managers, which are selected from its platform of thousands of strategies.
The event promises more buzz with Envestnet’s recent $500 million purchase of MoneyGuide, Tamarac’s acquisition of PortfolioCenter from Charles Schwab, and Yodlee’s purchase of Abe AI. The summit also will feature VIP speakers like former Secretary of State Colin Powell, Nasdaq CEO & President Adena Friedman, and popular advisor and blogger Michael Kitces. Plus, winners of the Envestnet Essential Advisor Awards and Invest in Others Grant Program Recipients will be honored.
More on the Asset Categories The largest Envestnet asset manager award categories are large-cap and small-to-medium cap, in which two awards each are presented. Other categories include international/global universe, fixed income, impact and strategist.
A new category added this year is alternatives, which is growing in importance as a strategy as market volatility rises, Clift says. “Alternatives is really the liquid alternative space, so think market-neutral, long-short or arbitrage types of strategies,” he says.
Only actively managed strategies are up for awards. As Clift explained, “there are a couple instances in the strategies space where they might be using passive products underneath, but they still are actively managing portfolios and allocations.”
Clift acknowledges there has been consolidation in the active space, but he says what they’ve seen is mainly the impact of reduced fees.
“There’s been some decompression [of fees] from the active managers to make them more competitive, and that’s generally healthy for the market,” he says. “But they still need to get paid for their services. They aren’t an index. We just have to make sure that whatever they’re charging, our investors are being compensated for it in excess return.”
He adds that the pool of active managers Envestnet reviews hasn’t shrunk. In fact, staff members look at roughly 10 new strategies on a weekly basis to determine if they should be on the Envestnet platform.
Further, “we actually did see [active managers] start to perform well in the fourth quarter when the markets got really volatile,” Clift says. “And they’ve continued to perform pretty well into 2019. When markets get volatile like we’ve seen … active management shines.”