Market Index Solutions
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For advisors and clients who prefer a cost-effective index-based solution, Placemark has developed Market Index Solutions™. Index-based investing has typically been accomplished through pooled investments such as mutual funds or ETFs. However, pooled investments cannot be customized for each individual investor’s needs (e.g., for security restrictions, existing security position, or taxes), so flexibility and control are limited. Using a Market Index Solutions portfolio, clients can cost-effectively maintain broad market exposure, while also customizing their portfolios to meet their individual tax needs, risk profiles, and restrictions. |
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The Solution
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| Increase Diversification | Enhanced Tax Coordination | Passive Core | ||
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| A Market Index Solutions portfolio is constructed to approximate the risk and return characteristics of the corresponding index, using a carefully selected subset of securities within that index. This allows clients to receive broad market exposure while enabling customization for tax, risk, and other purposes. | Placemark is able to harvest losses and match gains and losses across the MIS portfolio and other actively managed portfolios the client may have. With a large universe of securities from which to select and the ability to replicate the risk and return characteristics of the index, clients have much more flexibility in maintaining a highly diversified portfolio while also achieving a more tax-efficient solution. | Most alpha generating managers will realize taxable gains throughout the year. These taxable gains reduce the after-tax performance of the overall portfolio. A Market Index Solution portfolio can be utilized as a core holding specifically to gain broad market exposure while generating losses to offset the gains of other high-alpha managers used as part of the client’s overall portfolio. |
Alone or Unified:
The Market Index Solutions can be implemented as a stand-alone investment or as one part of a Unified Managed Account. When utilized as a stand-alone account, the Market Index Solution can offer increased diversification, be customized to meet the investor’s specific restrictions criteria, and be used to offset realized gains from outside accounts.
When used within a multi-asset class UMA that also incorporates actively managed portfolios, Market Index Solutions gives Placemark greater flexibility to manage the MIS portfolio to recognize offsetting short-term and long-term losses in a coordinated fashion based on the actual short-term and long term gains realized in the actively managed portions of a client’s portfolio. The net result is a highly customized and cost-effective wealth management solution tailored to the individual client’s tax needs.