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 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.
PMA empowers you to:
Access a robust toolkit of tax-managed overlay services designed to maximize after-tax wealth
Choose among a variety of environmental, social and governance (ESG) exclusion and overlay options
Develop an optimal transition plan of current assets customized to your tax circumstances and preferences
Diversify a concentrated stock position
Select or exclude individual securities based on personal preferences, objectives or constraints
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 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 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
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
- Brandywine Global Investment Management, LLC
- J.P. Morgan Investment Management, LLC
- Jacobs Levy Equity Management, Inc.
- William Blair Investment Management, LLC
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
- 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
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
- Intermede Investment Partners Limited and Intermede Global Partners Inc
- Pzena Investment Management, LLC
- Wellington Management Company LLP
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
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
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
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.
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.
You own restricted stock or equity options. Personalized Managed Accounts allows you to limit additional ownership in the company or industry.
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.
Centralized
- Trading
- Implementation
Year-around tax management
- Tax-loss harvesting
- Wash sale minimization
- Tax smart turnover
- Holding period
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:
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)
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.
Choose the optimal transition for your client and complete the PMA Account Onboarding steps.
Additional related materials
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.