SEATTLE, January 28, 2021 — Russell Investments has launched a range of inventive Personalized Managed Accounts (PMA), which can be customized with the goal to help advisors and their clients improve tax efficiency and maximize after-tax wealth. The firm’s new PMA solution features six tax-managed separately managed accounts (SMA) that leverage technology to help achieve growth and optimal after-tax outcomes. These distinctive solutions include three actively managed equity SMAs, two direct-indexed SMAs and a core equity SMA, which combines both active and lower-cost direct indexing. Each SMA gives financial advisors the opportunity to customize their clients’ portfolios to individual preferences.
“We’ve been helping investors maximize after-tax wealth for more than 30 years and with PMA we’re taking tax management to the next level of customization,” said Brad Jung, head of North America Advisor and Intermediary Solutions at Russell Investments. “By leveraging the award-winning VestmarkONE technology platform, our tax-managed overlay service powerfully combines our complete range of investment capabilities for year-round tax-smart management aimed at maximizing an investor’s after-tax outcome.”
The tax-managed PMA solutions feature a dedicated team of portfolio managers, quantitative research analysts and service teams, including some newly hired investment professionals; centralized trading and implementation; as well as automated year-round tax management capabilities, including tax-loss harvesting, wash sale minimization, tax-smart turnover and holding-period management. Ultimately, these SMAs aim to help clients meet their desired outcomes by minimizing the impact of taxes and transaction costs while maintaining tracking error to a target portfolio.
“Our PMA engine serves wealth management firms and their advisors with the institutional-caliber solutions that have made Russell Investments a global leader in outsourced investment management (OCIO),” Jung added. “We targeted tax management for our PMA launch in part because research indicates the tax drag on a typical U.S. equity mutual fund and ETF was big enough to impair any investor’s ability to generate the after-tax wealth they desire.”
The following six PMA solutions, which are detailed on the firm’s dedicated Personalized Managed Accounts website, extend an already wide range of solutions for financial professionals.
- Tax-managed Core Equity SMA
- Tax-managed Large Cap SMA
- Tax-managed Small/Mid Cap SMA
- Tax-managed International SMA
- Tax-managed (direct-indexed) DI Large Cap SMA
- Tax-managed DI All Cap SMA
Russell Investments announced in August that the firm had partnered with Vestmark, a leading provider of portfolio management/trading solutions and outsourced services for financial institutions and their advisors, to leverage their technological expertise. This collaboration extends to Russell Investments’ transition management program, which offers a tailored approach to help advisors transition portfolios in a tax-efficient manner while tracking their underlying investment strategies.
Russell Investments’ launch of Personalized Managed Accounts further establishes the firm’s leadership position in the managed accounts space, which according to Cerulli Associates’ US Asset Allocation Model Portfolios 2020 report, ranks as the industry’s top provider of asset allocation model portfolios based on total assets¹.
“The pandemic hasn’t deterred rising investor demand for more control and customization of their portfolios,” said Robert Hostetter, global head of solutions at Russell Investments. “With five decades of experience providing institutional investment solutions and a deep OCIO heritage, we’re moving full speed ahead with value-additive and complementary PMA solutions to help our partners and advisors optimize their business and offer a more customized way to help their clients meet desired outcomes.”
Hostetter added that Russell Investments already is working to expand the Personalized Managed Accounts program, noting that Russell Investments’ institutional capabilities translate well into other areas that are in focus within the managed accounts industry. This includes overlay and optimization options that feature environmental, social & governance (ESG) and factor exposures.
About Russell Investments
Russell Investments is a leading global investment firm providing tailored solutions and services to institutions and individuals through financial intermediaries. Russell Investments is dedicated to improving people’s financial security, leveraging an 84-year client-centric heritage rooted in investment innovation. Since 1985, for example, with the launch of our first tax-exempt bond fund, the firm has been helping investors grow after-tax wealth. Russell Investments is the fifth-largest adviser globally with $323.7 billion in assets under management (as of 12/31/2020) and $2.5 trillion in assets under advisement (as of 6/30/2020) for clients in 32 countries. Headquartered in Seattle, Washington, Russell Investments operates through 18 additional offices in major financial centers such as New York, London, Tokyo and Shanghai.
Steve Claiborne, 206-505-1858, email@example.com
¹Out of 25 providers. Based on total assets. Model providers surveyed during 4Q 2019 were asked to provide estimated asset levels in models for accounts into which they had visibility. Source: Exhibit 3.02 Top-25 Asset Manager and Third-Party Strategist Providers of Asset Allocation Model Portfolios, The Cerulli Report - U.S. Asset Allocation Model Portfolios 2020.