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2022 Envestnet Asset Manager Awards

Envestnet, ThinkAdvisor Zoom In on Top Active Managers

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What You Need to Know

  • Envestnet and Investment Advisor have selected the top active manager finalists in eight categories.
  • Winners of each category will be announced during the Envestnet Advisor Summit on May 11 in Charlotte, North Carolina.
  • The Sustainability category has grown dramatically, while this year the Specialty category returns with several contenders.

Last year’s 27% return in the S&P 500 didn’t come without some issues. Volatility kept investors nervous, especially as the Federal Reserve increased interest rates (with a promise of more hikes coming) and inflation seemed more entrenched than transitory.

“It was a challenging year because we had volatility and an aggressive Federal Reserve,” Tim Clift, chief investment strategist of Envestnet | PMC, told ThinkAdvisor. “All those things combined were an opportunity for really good active managers to be able to select certain areas and avoid others. It was a much more dynamic and volatile year than we’ve typically seen.”

This confluence of events heightened the competition for top managers in the 18th annual Asset Manager of the Year awards.

The yearly awards, presented by Envestnet | PMC and Investment Advisor recognize active managers in eight different categories who have beaten their benchmarks, shown solid performance in general over time and are the best in their respective asset class. An overall Manager of the Year for “embodying excellence in asset management” will be selected from these winners.

The 2022 finalists are listed below. Winners will be announced on May 11 during the Envestnet Advisor Summit, being held this year in Charlotte, North Carolina. The winners will be showcased in the July/August issue of Investment Advisor as well as in articles and videos on ThinkAdvisor.

This year brought not only growth in candidates from the 21,000 products on the Envestnet platform, but strong performance across the board. In fact, this year included a Specialty category, which hasn’t had contenders since 2017.

“Specialty is a catchall for strategies that don’t fall into the traditional asset classes that we’ve given awards to,” Clift said. “But we did want to have a place to recognize outstanding managers that may be even more of a niche asset class, and not every year there are good options. So we make the call year by year. This year we actually had four [potentials].”

Big Trends

One of the newer categories is sustainable investing, which has had huge growth, Clift said, as “most companies have or are adopting some level of impact or sustainability in their businesses.”

Sustainability assets have surged on the platform, Clift stated. “And the number of products available also has increased dramatically.” He added that advisor interest has “also grown significantly.”

Indeed, many of the managers selected in “traditional” categories actively participate in sustainability as well. In fact, “our research folks are asking every single manager whether this is part of their investment thesis, and it does weigh in on our investment decisions,” Clift explained.

Another trend is the growth in smart beta investing, Clift said, “which has helped identify certain factors like value, momentum and quality that are supported by academic research, and then isolating them from a performance perspective, and then basically being able to bring the cost down on owning those factors.”

Smart beta is part of a quantitative model, which means, says Clift, it’s moved “our portfolio construction from active and passive, to active, smart beta and passive.”

Also, a challenge to managers has been the concentration of mega-cap companies that have been driving index performance. For example, if large-cap managers didn’t have a few of the largest tech companies in their portfolios, it would have dragged down returns relative to the market, Clift said.

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“They basically would have to overweight these very concentrated stocks to be able to beat the benchmark,” he said, especially because those stocks most likely are “overrepresented” in the benchmark.

“It’s certainly been a challenge for active managers,” he said. “We haven’t seen the breadth of companies doing well. It’s been just very narrow.”

This Year’s Finalists

The finalists for the 2022 awards have been culled from thousands on the Envestnet platform by a group of analysts, rated by category and then reviewed by the judging committee.

To be considered for an award, the portfolio manager should have $200 million in assets and three years of experience (this can fluctuate according to robustness of each category, Clift noted.) The managers also need to be open to new investment on the Envestnet platform.

Although stellar performance is a key ingredient in selecting winners, there are other considerations. Judges aren’t just selecting winners who have had a “hot” year, but had been consistent in performance, Clift noted.

See:  Envestnet Announces the Finalists for the 2022 Asset Manager of the Year Award Winners

Demand and success also are included. That is, analysts and the judging committee like to see a steady accumulation of growth and “a lot of underlying holders, rather than just a few,” Clift said. “That makes it much more robust and reduces concerns about outflows from a single investor.”

As noted above, sustainable investing has grown in attention and investment since the category was introduced in 2016. Any future categories added will likely be in this space, Clift said.

Choosing the Finalists

For 18 years, Investment Advisor and Envestnet | PMC have partnered to find, select and honor the Asset Managers of the Year in multiple categories.

The selection process, which takes about two months, begins with the Envestnet team of analysts who research each category for best-in-class managers by using several metrics. In addition, the analysts meet with most management teams to narrow the field in each category, which is between 30 to 200 managers. This year, as last, meetings were done by video conference due to the pandemic.

The analysts make detailed presentations of top choices to the judging committee, which then deliberates and votes on the winners. The selection committee consists of Envestnet | PMC Chief Investment Strategist Tim Clift; Managing Director Erik Preus, CFA; Dana D’ Auria, Co-Chief Investment Officer Dana D’ Auria; Investment Advisor Editor-in-Chief Janet Levaux; and Managing Editor Ginger Szala.

Envestnet’s technology and services are currently used by roughly 108,000 advisors and more than 6,000 companies — including 18 of the 20 largest U.S. banks, 47 of the 50 largest wealth management and brokerage firms, over 500 of the largest RIAs, and hundreds of fintech firms companies.

Finalists for the 2022 awards by category are:

Large-Cap Equity

  • Alley Company – Alley Dividend Portfolio
  • John Hancock Asset Management – Fundamental Large Cap Core
  • Raub Brock Capital Management – Raub Brock Dividend Growth
  • Wakefield Asset Management - Wakefield Large Cap Equity

Small/SMID/Mid-Cap Equity

  • Congress Asset Management – Congress Mid Cap Growth
  • Geneva Capital Management – Geneva Mid Cap Growth
  • Impax Asset Management – Pax Small Cap
  • Tributary Capital Management – Tributary Small Cap

Global, International and Emerging Market

  • Arcadian Asset Management – Arcadian International ADR SMA
  • J O Hambro Capital Management – J O Hambro Emerging Market Opportunities Fund

Sustainable

  • Schroders – Hartford Schroders International Stock Fund
  • Trillium Asset Management – Trillium ESG Small/Mid Cap Core Managed Account

Liquid Alternatives

  • AlphaSimplex Group – AlphaSimplex Managed Futures Strategy Fund
  • Capital Wealth Planning – Capital Wealth Enhanced Dividend Income Portfolio

Multi-Asset Strategist

  • Sage – Sage Advisory Tactical ETF Strategy
  • SSI Investment Management – SSI Flexible Allocation Portfolio

Fixed Income 

  • Capital Group – American Funds Bond Fund of America
  • Federated Hermes – Federated Hermes Total Return Bond Fund

Specialty

  • Lazard Asset Management – Lazard Global Listed Infrastructure Fund
  • Nuveen – Nuveen Preferred Security & Income Fund

Pictured: Envestnet | PMC Chief Investment Strategist Tim Clift