A trio of active investment managers have formed a joint venture to offer customized ETF models to financial advisors.
Burney Company, which specializes in American stocks; Rayliant, which specializes in ex-US equities, particularly emerging and Asian markets; and Clough Capital Partners, which specializes in alternatives, have launched Powered by ETFs. Models will be built to match the risk tolerance of individual clients and provide efficient use and communication with clients through the outsourced services of Burney's chief investment officer. OCIO services will be available at no additional charge to advisors who distribute in Powered by ETFs models, provided they meet required investment minimums.
Models will be actively managed and advisors will have access to collaborative market research from all three firms.
“We are offering a truly comprehensive solution. Our models have weathered multiple market cycles, adapting and performing consistently,” Lowell Pratt, president and chairman of Burney, said in a statement.
Chuck Clough of Clough Capital Partners noted that the alternative strategies included in the Powered by ETF models will provide advisors with the tools to achieve diversification and alpha generation, while Rayliant's Jason Hsu said, “We're bringing advisors global opportunities supported by research and local knowledge.”
Asset managers are increasingly offering customized models for advisors as their popularity grows.
A survey by market research firm Cerulli Associates earlier this year found that 60% of asset managers identified offering custom models as one of their top three current initiatives. Another survey by Cerulli showed advisers were planning to prioritize the use of model portfolios over funds of funds because they like the greater customization and more transparent fee structure that model wallets offer.
In recent weeks, asset managers including Goldman Sachs AND BlackRock announced new custom model launches and partnerships. In addition to asset managers, alternative investment platforms such as Also, special AND iCapital have invested in the capacities of the model portfolio this year as well.