A trio of active investment managers have formed a joint venture to offer custom ETF models to financial advisors.
Burney Company, which specializes in U.S. equities; Rayliant, which specializes in ex-U.S. equities, particularly emerging and Asian markets; and Clough Capital Partners, which specializes in alternatives, have launched Powered by ETFs. The models will be constructed to match individual clients’ risk tolerance and offer streamlined usage and client communication through Burney’s outsourced chief investment officer services. The OCIO services will be available at no additional charge to advisors who allocate to Powered by ETFs models, provided they meet the required investment minimums.
The models will be actively managed, and advisors will have access to collaborative market research from the three firms.
“We’re offering a truly comprehensive solution. Our models have weathered multiple market cycles, consistently adapting and performing,” Lowell Pratt, president and chairman of Burney, said in a statement.
Chuck Clough of Clough Capital Partners noted that the alternative strategies incorporated into the Powered by ETF models will offer advisors the tools to achieve diversification and alpha generation, while Jason Hsu of Rayliant said, “We’re bringing advisors global opportunities backed by research and local insights.”
Asset managers are increasingly offering custom models to advisors as their popularity grows.
A survey by market research firm Cerulli Associates earlier this year found 60% of asset managers identified providing custom models as one of their top three current initiatives. Another Cerulli survey showed advisors were planning to prioritize the use of model portfolios over funds of funds because they like the greater customization and more transparent fee structure model portfolios 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 CAIS and iCapital have invested in model portfolio capabilities this year as well.