Now Reading
Why managed portfolios make sense in today’s uncertain environment

Why managed portfolios make sense in today’s uncertain environment

Environment Concept - Globe Glass In Green Forest With Sunlight

Environment Concept - Globe Glass In Green Forest With Sunlight

RomoloTavani/iStock via Getty Images

Advisors will face challenges in finding alpha and consistent returns with the stock market at its highest point, high valuations, low interest rates and tight credit spreads. The ability to be more strategic – making the right timing, overweighting, or underweighting decisions – is going to be a greater role in achieving long-term investment goals.

Advisors might be able to successfully navigate this environment by using managed portfolios. Macro view: Managed portfolios offer multi-asset and diversified global portfolios that allow advisors to access asset classes they might not have the ability to invest in, or that are more niche, such as commodities, emerging market debt and REITs. Managed portfolios are also dynamic, as they can include both strategic and tactical positioning. Advisors can be proactive and capture more upside when there is risk, but also protect when there is less risk.

Given current market conditions, it is crucial to have a solid risk management plan. Advisors need to be able provide consistent results for clients and ease the ride through volatile markets. Managed portfolios provide a consistent, repeatable, and transparent way to manage such investment risk.

The way clients interact with advisors has also changed. While some clients may still require custom portfolios for their financial planning, many are now rethinking their long term financial plan and looking for someone who understands their family’s unique needs. They might be looking to have a conversation with someone about their goals or just to keep them on track. These are extremely valuable, but time-consuming activities. It is important to realize that advisors who use models spend approximately 10% of their time investing management activities. This compares to 16.2% for advisors who create models in their practice, and 19.4% for advisors who create custom portfolios for clients.* It’s important to recognize that advisors are still providing significant value by conducting due diligence on the portfolios and implementing them within the overall broader client portfolio.

Bottom line

Managed portfolios are a way for advisors to find new and better ways to increase value in an investment environment that may involve more frequent tactical shifts. They also allow for a deeper relationship between clients and advisors who are continually evolving their expectations and needs.

DISCLOSURES

*Source: Cerulli – U.S. Asset Allocation Model Portfolios Report, 2018.

2016-2022 Columbia Management Investment Advisers, LLC. All rights reserved.

Columbia Threadneedle Investments can approve the use of certain products, materials, or services.

You can leave the Glossary by clicking the link above. columbiathreadneedle.com/us. Check out our Terms and Conditions for our hyperlinking disclosure.

Investors should carefully consider the investment objectives, risks and charges of mutual funds, ETFs, and Tri-Continental Corporation before making an investment. This and other important information can be found on each fund’s website. Get a free prospectus. Before investing, it is important to read the prospectus carefully. Before investing, investors should carefully review the Columbia Seligman Premium Technology Growth Fund’s investment objectives, risks, charges, as well as expenses. Contact your financial advisor to obtain the most recent periodic reports as well as other regulatory filings for the Fund. Download the reports here. These reports and other filings are also available on the Securities and Exchange Commission’s EDGAR Database. Before investing, you should carefully read these reports.

See Also
Stuart Blofeld, Training Lead in BREs SmartSite team, at Futurebuild.

These views are current as of the date given and may change due to market conditions or other changes. They may also differ from those expressed by Columbia Management Investment Advisers LLC (CMIA), associates or affiliates. Actual investments or investment decisions made either by CMIA and affiliates for clients or for its own account, may not reflect the views expressed. This information does not constitute investment advice and does no take into account individual investor circumstances. An investor’s financial needs, goals, time frame, and risk tolerance should all be considered when making investment decisions. These asset classes may not suit all investors. Past performance is not a guarantee of future results and forecasts should not be taken as a guarantee. There is no guarantee that the market and economic conditions will remain the same or that forecasts will be accurate, as they change frequently.

Columbia Funds and Columbia Acorn Funds can be distributed by Columbia Management Investment Distributors, Inc. member FINRA. Columbia Funds, managed by Columbia Management Investment Advisers, LLC, and Columbia Acorn Funds, managed by Columbia Wanger Asset Management, LLC, which is a subsidiary Columbia Management Investment Advisers, LLC. ALPS Distributors, Inc., member distributes ETFs. FINRA, an unaffiliated entity.

Columbia Threadneedle Investments, also known as Columbia Threadneedle, is the global brand of the Columbia and Threadneedle company group.

NOT FDIC INSURED No Bank Guarantee May Lose Value

Original Post

Editor’s Note:Seeking Alpha editors chose the summary bullets of this article.

View Comments (0)

Leave a Reply

Your email address will not be published.