Envestnet Files to Offer Its Own ETFs on Platform

Envestnet Asset Management is advisor for the funds, but they will all have subadvisors that will be in charge of the investment decisions. Neither the names of the subadvisors nor the fees of the ETFs were disclosed in the SEC filing.

According to the filing, Envestnet Asset Management will determine the active-passive investment mix, based on a variety of factors, including proprietary research that looks at the likelihood of active managers outperforming or underperforming within the asset classes in which the fund invests, due diligence on available subadvisors and how they can contribute to overall fund performance and academic research on factor investing.

Tim Welsh, the president and founder of Nexus Strategy, a consulting firm for advisors, says the move by Envestnet is "an interesting development as Envestnet plays dual roles as a platform distributor as well as asset manager."

He didn't think the plan will have "any real long-term impact to advisors or other asset managers," which are already included on the Envestnet platform, although it will allow Envestnet to list its funds first. "To be a platform owner and asset manager is a pretty powerful position to be in."