PERSONALIZED
MANAGED ACCOUNTS

The next level of customization in Separately Managed Accounts

Steering wheel

PERSONALIZED
MANAGED ACCOUNTS

The next level of customization in Separately Managed Accounts

What is Personalized Managed Accounts (PMA)?

Every investor’s needs and preferences are unique. And as wealth grows, so do expectations and complexity—like tax management and environmental, social and governance (ESG) considerations. Yet the level of personalization and customization required to meet each client’s distinct goals can quickly send a practice into disarray.

That’s where Personalized Managed Accounts comes in. PMA is a distinctive solution tailored to investors’ unique and specific needs, featuring:

  • Separately managed accounts
  • Custom overlay services (e.g., tax management and ESG considerations)
  • Personalized transition management

The benefits of PMA

PMA gives you and your clients access to an investing approach that leverages Russell Investments’ extensive investment manager research, selection and monitoring process. This process is our trademark, forming the cornerstone of our advice to global institutional investors for more than 50 years.

But it doesn’t stop there. Now, through PMA, investors have access to the next level of a customized separate account solution that is built entirely around their unique needs. PMA lets you personalize the portfolio at the individual account and securities levels.

WealthManagement.com 2022 Industry Awards Winner

2022 Wealthies Award Winner

 

WealthManagement.com announced Russell Investments as a 2022 Industry Award (the “Wealthies”) winner in the Separate Accounts category for its Personalized Managed Accounts solution. A panel of independent judges made up of top names in the industry and led by WealthManagement.com determined the winners on September 8, 2022. The award recognizes those firms and individuals who are bringing innovations to help support financial advisor success. Russell Investments has paid a nominal membership fee to WealthManagement.com.

Take control and personalize your separately managed accounts with PMA.

PMA empowers you to:

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Access a robust toolkit of tax-managed overlay services designed to maximize after-tax wealth

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Choose among a variety of environmental, social and governance (ESG) exclusion and overlay options

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Develop an optimal transition plan of current assets customized to your tax circumstances and preferences

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Diversify a concentrated stock position

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Select or exclude individual securities based on personal preferences, objectives or constraints

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Pair with other asset class portfolios to create a total portfolio that meets your risk objective

Achieve all of this while leveraging the Russell Investments partnership to implement Personalized Managed Accounts seamlessly and with little effort on your part.

Use our investor-friendly brochure to help explain the benefits of Personalized Managed Accounts to your clients.

Read our blog post for a quick refresher on the pros and cons of separately managed accounts (SMAs), plus a potential solution for today’s investors: Personalized Managed Accounts.

Explore the SMAs at the foundation of Personalized Managed Accounts

First, choose your chassis. Depending on your goals and preferences, one, or a combination of several, of our Separately Managed Accounts will form the foundation for your personalized portfolio. Then select one or multiple features to customize your portfolio to best reflect your goals, circumstances and preferences.

Includes:

  • Personalized Core Equity SMA
  • Personalized DI Core Equity SMA

Includes:

  • Personalized Large Cap SMA
  • Personalized Small/Mid SMA
  • Personalized International SMA

Includes:

  • Personalized DI All Cap SMA
  • Personalized DI Large Cap SMA
  • Personalized DI International SMA

The core equity solutions

Personalized Core Equity SMA
Broadly diversified global equity portfolio designed to offer a high level of personalization at an attractive cost

The Personalized Core Equity SMA seeks to provide long-term capital growth through an allocation to U.S. and International stocks while also delivering customized investment outcomes by incorporating client-directed customization, e.g., tax management, Environmental, Social and Governance (ESG) considerations, and custom screens. The strategy is designed to outperform a blended index of the Russell 3000® Index and the MSCI World ex USA (Net) Index over a full market cycle.

 

The percentages represent the target allocation as of 8/11/2022 and may change in the future.

Minimum account size:
$500,000

Typical holdings range:
350–550

Personalized Core Equity SMA Overview

Personalized Core Equity SMA Fact Sheet

Personalized DI Core Equity SMA
Broadly diversified global equity index strategy designed to offer a high level of personalization

The Personalized Direct Indexed (DI) Core Equity SMA seeks to provide long-term capital growth through an allocation to U.S. and international developed markets stocks while also delivering customized investment outcomes by incorporating client-directed customization, e.g., tax management, Environmental, Social and Governance (ESG) considerations, and custom screens. The strategy is designed to track the performance of a blended allocation to the Russell 3000® Index and the MSCI World ex USA (Net) Index.

 

The percentages represent the target allocation as of 6/1/2022 and may change in the future.

Minimum account size:
$500,000

Typical holdings range:
500–900

Personalized DI Core Equity SMA Overview

Options to meet your needs

ACTIVE STRATEGIES

Three actively-managed equity SMAs – Portfolios focused on different parts of the equity market, managed by best-in-class managers researched by Russell Investments.

Personalized Large Cap SMA

The Personalized Large Cap SMA seeks to provide long-term capital growth from U.S. large cap stocks while delivering customized investment outcomes by incorporating client-directed customization, e.g., tax management, Environmental, Social and Governance (ESG) considerations, and custom screens. The strategy is designed to outperform the S&P 500® Index over a full market cycle.

Minimum account size:
$80,000-$100,000

Typical holdings:
80

Underlying managers*:
  • Brandywine Global Investment Management, LLC
  • J.P. Morgan Investment Management, LLC
  • Jacobs Levy Equity Management, Inc.
  • William Blair Investment Management, LLC
Personalized Large Cap SMA
Overview

Personalized Large Cap SMA
Fact Sheet

Personalized Small/Mid Cap SMA

The Personalized Small/Mid Cap SMA seeks to provide long–term capital growth from U.S. small and mid–cap stocks while delivering customized investment outcomes by incorporating client–directed customization, e.g., tax management, Environmental, Social and Governance (ESG) considerations, and custom screens. The strategy is designed to outperform the Russell 2500 Index over a full market cycle.

Minimum account size:
$60,000-$100,000

Typical holdings:
80

Underlying managers*:
  • Ancora Advisors, LLC
  • BAMCO, Inc.
  • Cardinal Capital Management, LLC
  • Copeland Capital Management, LLC
  • DePrince, Race & Zollo, Inc.
  • Polen Capital Management LLC
  • Summit Creek Advisors, LLC
Personalized Small/Mid Cap SMA
Overview

Personalized Small/Mid Cap SMA
Fact Sheet

Personalized International SMA

The Personalized International SMA seeks to provide long-term capital growth from non–U.S. developed markets stocks while delivering customized investment outcomes by incorporating client-directed customization, e.g., tax management, Environmental, Social and Governance (ESG) considerations, and custom screens. The strategy is designed to outperform the MSCI World ex USA (Net) Index over a full market cycle.

Minimum account size:
$60,000-$100,000

Typical holdings:
80

Underlying managers*:
  • Intermede Investment Partners Limited and Intermede Global Partners Inc
  • Pzena Investment Management, LLC
  • Wellington Management Company LLP
Personalized International SMA
Overview

Personalized International SMA
Fact Sheet

PASSIVE STRATEGIES

Three direct indexed (DI) SMAs – Provide index-like market exposure through direct stock holdings & seek to harvest losses which can offset taxable distributions from other investments.

Personalized DI All Cap SMA

The Personalized DI All Cap SMA seeks to provide long–term capital growth from U.S. stocks while delivering personalized investment outcomes by incorporating client–directed customization, e.g., tax management, Environmental, Social and Governance (ESG) considerations, and custom screens. The strategy is designed to track the performance of the Russell 3000® Index.

Minimum account size:
$250,000

Typical holdings range:
300–600

Personalized DI All Cap SMA
Overview

Personalized DI All Cap SMA
Fact Sheet

Personalized DI Large Cap SMA

The Personalized DI Large Cap SMA seeks to provide long–term capital growth from U.S. large cap stocks while delivering personalized investment outcomes by incorporating client–directed customization, e.g., tax management, Environmental, Social and Governance (ESG) considerations, and custom screens. The strategy is designed to track the performance of the S&P 500® Index.

Minimum account size:
$100,000

Typical holdings range:
200–350

Personalized DI Large Cap SMA
Overview

Personalized DI Large Cap SMA
Fact Sheet

Personalized DI International SMA

The Personalized Direct Indexed (DI) International SMA seeks to provide long-term capital growth from non-U.S. developed markets stocks while delivering personalized investment outcomes by incorporating client-directed customization, e.g., tax management, Environmental, Social and Governance (ESG) considerations, and custom screens. The strategy is designed to track the performance of the MSCI World ex USA (Net) Index.

Minimum account size:
$250,000

Typical holdings range:
200–450

Personalized DI International SMA Overview

PMA gives you flexibility and choice

Add custom overlay and exclusion services: These can be added to your Personalized Separately Managed Accounts to provide a truly active approach offering flexibility and a higher level of customization.

Steer your portfolio in the right direction.
Build around your needs.

Custom-design your portfolio:

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You have beliefs, either faith-based or ESG preferences, that may lean you toward or away from specific types of companies. With Personalized Managed Accounts, you can restrict purchases to those stocks, industries and categories in your customized portfolio.

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You own restricted stock or equity options. Personalized Managed Accounts allows you to limit additional ownership in the company or industry.

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You have a concentrated stock position with a low-cost basis and want to avoid triggering significant capital gains if you sold it. With Personalized Managed Accounts you can build around this position or transition out of it over time while minimizing the tax.

Here’s how we can help you maximize your after-tax wealth.

Tax-managed overlay services provide:

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Centralized

  • Trading
  • Implementation
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Year-around tax management

  • Tax-loss harvesting
  • Wash sale minimization
  • Tax smart turnover
  • Holding period
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Dedicated team

  • Investment professionals focused on maximizing your after-tax outcome

Transition accounts easily and efficiently

Our transition management is customized to your client's personal preferences and makes it easy for you to transition your client's current assets to PMA in a tax-efficient manner. Through our custom transition analysis report, we can develop an optimal transition plan customized to each of your clients’ tax preferences and circumstances.

Our Consultative Review process entails:

1

Provide your client’s existing holding information to the Russell Investments' PMA Service Team.

  • Client’s name
  • Holding information per lot (ticker, date acquired, number of shares, and cost basis per share)
  • Target PMA model strategy (optional)
  • Short-term capital gains tax rate
  • Long-term capital gains tax rate
  • ESG constraints (if any)
  • Stock restrictions (if any)
  • Tax budget (if any)
  • Short-term capital gains budget (if any)
  • Long-term capital gains budget (if any)

2

Your Russell Investments team will develop a custom transition proposal with you to take into account all your client’s individual tax preferences and circumstances.

Depending on the target SMA, transition options can include a time-period (immediate, 3- or 5-years), tax, or capital gains budget approach.

A Tax-Budget transition approach is available for: both Personalized Core Equity SMA solutions, and all Personalized DI SMAs. The Timeline approach is available for all Personalized SMA solutions.

3

Choose the optimal transition for your client and complete the PMA Account Onboarding steps.

Additional related materials

PMA Brochure

PMA Direct Indexing eKit

Personalized DI All Cap SMA One-Pager

PMA Direct Indexing Solutions

Research paper: Mitigating taxes while transitioning to a new strategy

Research Paper: Mitigating taxes while transitioning to a new strategy

Research paper: Mitigating taxes while transitioning to a new strategy

PMA Exclusionary Screens Brochure
 

Personalized DI All Cap SMA One-Pager

White Paper: SMA design in the presence of taxes
 

Transition analysis sample report

Transition Analysis Sample Report
 

Related content

Using Russell Investments’ Separately Managed Accounts, investors can not only gain access to institutional-quality money managers at reduced account minimums, but also implement a tax-efficient approach that leverages Russell Investments’ renowned investment manager research, selection and monitoring.

 

Since 1985, with the launch of our Tax-Exempt Bond Fund, Russell Investments' goal has been to help investors maximize their after-tax wealth. Explore our Tax-Managed Model Strategies as well as our Tax-Managed & Tax-Exempt Funds.

Notice:

* Managers listed above are current as of 10/13/2022. Russell Investment Management, LLC (“RIM”) selects the money managers and optimizes the portfolio utilizing quantitative and/or rules-based processes. RIM’s portfolio construction process seeks to achieve the desired level of concentration, appropriate risk management, and exposure to strategic and tactical sources of excess return intended to meet the separately managed accounts investment objective over a market cycle. These money managers are unaffiliated with RIM and have non-discretionary asset management assignments pursuant to which they provide a model portfolio to RIM representing their investment recommendations. RIM may change portfolio asset allocation at any time, including not allocating portfolio assets to one or more money manager strategies.

The S&P 500® Index is a product of S&P Dow Jones Indices LLC or its affiliates (“SPDJI”) and has been licensed for use by Russell Investments. Standard & Poor’s® and S&P® are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by Russell Investments. The Personalized DI Large Cap SMA is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, or their respective affiliates and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions, or interruptions of the S&P 500 Index.