Parametric launches Custom Core Fixed Income separate accounts
Parametric Portfolio Associates (Parametric) has launched Parametric Custom Core Fixed Income individual separate accounts, which provide advisors and their clients with exposure to the fixed income markets they select, combining the benefits of index-based portfolio construction, active credit oversight and direct ownership of securities.
Like Custom Core Equity portfolios, Custom Core Fixed Income portfolios can be customised to reflect each client's individual responsible investment criteria and other desired portfolio tilts and inclusions, to incorporate the client's pre-existing securities holdings and to harvest tax losses on a year-round systematic basis.
These bespoke benchmark-based separate accounts compete against index exchange-traded funds (ETFs) and index mutual funds across a range of applications on the basis of enhanced tax efficiency, increased client control over portfolio construction and management, and the avoidance of pass-through fund operating and trading costs. Parametric's Custom Core Fixed Income portfolios also provide the potential benefits of active credit oversight and direct access to fixed income market liquidity.
"Advisors and investors are increasingly seeking customised solutions across their full portfolios. As a pioneer of equity separate accounts, we're pleased to expand Parametric's Custom Core benchmark-based separate account offerings to fixed income portfolios," says Brian Langstraat, Chief Executive Officer, Parametric. "The extensive customisation potential of Custom Core helps advisors meet the unique needs of their clients, especially in today's turbulent market environment where investors are acutely concerned about income protection and liquidity. Custom Core's proprietary technology, customisation capabilities and client reporting tools deliver scalable solutions to make advisors' jobs easier."
Custom Core Fixed Income portfolios are managed by Parametric's team of 45 fixed income professionals, led by James H Evans, CFA, Chief Investment Officer, Fixed Income. The team has been developing portfolio construction algorithms during the past several years to bring Custom Core's advantages to bond investors offering strategies managed against the corporate, government/credit and broad fixed income bond indices.
"Custom Core Fixed Income applies a hybrid investment approach using forward-looking credit analysis and rules-based portfolio construction," says Tom Luster, Managing Director, Taxable SMA Strategies. "This enables Parametric to manage a portfolio's systematic risk and deliver cost-effective, customised investment solutions for every investor's unique needs."
Parametric draws on decades of experience to develop scalable income investment strategies that utilise state-of-the-art technology to seamlessly integrate traditional credit research, quantitative risk factors analysis and specialised trading. As of 30 June, 2020, Parametric managed USD47.6 billion in systematically invested fixed income assets.