What You Need to Know
- J.P. Morgan's new digital SMA platform leverages tech from 55ip, a firm it acquired in late 2020.
- The J.P. Morgan Custom Invest - U.S. Large Cap Equity Strategy is the first SMA offered on the platform.
- The firm plans to launch a series of active SMAs and additional indexes for clients.
J.P. Morgan Asset Management launched a new Tax-Smart Separately Managed Account Platform that it said Tuesday enables advisors to build customized portfolios and seek better after-tax returns for their clients.
The new SMA platform combines J.P. Morgan’s investment expertise with ActiveTax technology from 55ip, a fintech firm it acquired in late 2020.
The platform will be “one of the first of its kind to offer custom index” SMAs and model portfolios of mutual funds and exchange-traded funds in one digital portal, providing “seamless portfolio customization, tax management and reporting functionality,” according to J.P. Morgan.
The J.P. Morgan Custom Invest – U.S. Large Cap Equity Strategy is the first SMA offered on the platform.
But additional offerings will be added to the platform this year, Jed Laskowitz, global head of Asset Management Solutions at J.P. Morgan Asset Management, told ThinkAdvisor.
“We have plans to launch a series of both active J.P. Morgan Asset Management separately managed accounts and additional indices for our clients,” Laskowitz said.
“A very small percentage of SMAs have an explicit tax-managed overlay and most don’t have something that’s as automated as what we’ve built that will allow for more frequent tax loss harvesting,” he said.
But he added: “This is just a start and we’re going to be launching a series of products over the course of the next month and year.”
The company’s next launch on the platform will be an “active large-cap core strategy and then we plan on launching a series of additional indices and other active strategies,” he told ThinkAdvisor.
The active large-cap core strategy will come “in the next few months” and the others will follow by the end of this year, he said, adding the “roadmap will extend into 2023.”
J.P. Morgan has been “working with 55ip for a couple of years now around the area that they started their business in, which is model portfolios of mutual funds and ETFs,” he pointed out.
Since the acquisition, “we’ve been working on ways to extend that and we believe that separate accounts was a natural extension to the model portfolio business,” he said.
The J.P. Morgan Custom Invest – U.S. Large Cap Equity Strategy enables clients to create a custom portfolio of 275 to 350 stocks benchmarked to the S&P 500, providing investor-directed customization and enhanced tax management capabilities, the company said.