Page 24 - Investment Advisor June 2022

ENVESTNET AWARDS

By Ginger Szala

Envestnet, Investment Advisor Announce

Top Active Managers

The 18th annual Asset Manager of the Year Award program recognizes

active managers in eight categories.

ast year’s 27% return in the S&P “our research folks are asking every single
500 didn’t come without some manager whether this is part of their
Lissues. Volatility kept investors investment thesis, and it does weigh in on
nervous, especially as the Federal Reserve our investment decisions,” Clift explained.
increased interest rates (with a prom- Another trend is the growth in smart
ise of more hikes coming) and inflation beta investing, Clift said, “which has
seemed more entrenched than transitory. helped identify certain factors like value,
“It was a challenging year because we momentum and quality that are support-
had volatility and an aggressive Federal ed by academic research, and then isolat-
Reserve,” Tim Clift, chief investment ing them from a performance perspective,
strategist of Envestnet | PMC, told and then basically being able to bring the
Investment Advisor. “All those things cost down on owning those factors.”
combined were an opportunity for really Smart beta is part of a quantitative
good active managers to be able to select on the Envestnet platform, but strong model, which means, says Clift, it’s moved
certain areas and avoid others. It was a performance across the board. In fact, “our portfolio construction from active and
much more dynamic and volatile year this year included a Specialty category, passive, to active, smart beta and passive.”
than we’ve typically seen.” which hasn’t had contenders since 2017. Also, a challenge to managers has
This confluence of events height- “Specialty is a catchall for strategies been the concentration of mega-cap
ened the competition for top managers that don’t fall into the traditional asset companies that have been driving index
in the 18th annual Asset Manager of the classes that we’ve given awards to,” Clift performance. For example, if large-cap
Year awards. said. “But we did want to have a place managers didn’t have a few of the larg-
The yearly awards, presented to recognize outstanding managers that est tech companies in their portfolios, it
by Envestnet | PMC and Investment may be even more of a niche asset class, would have dragged down returns rela-
Advisor recognize active managers in and not every year there are good options. tive to the market, Clift said.
eight different categories who have So we make the call year by year. This “They basically would have to over-
beaten their benchmarks, shown solid year we actually had four [potentials].” weight these very concentrated stocks to
performance in general over time and be able to beat the benchmark,” he said,
are the best in their respective asset BIG TRENDS especially because those stocks most likely
class. An overall Manager of the Year for One of the newer categories is sustain- are “overrepresented” in the benchmark.
“embodying excellence in asset manage- able investing, which has had huge “It’s certainly been a challenge for
ment” is selected from these winners. growth, Clift said, as “most companies active managers,” he said. “We haven’t
The 2022 winners and finalists have or are adopting some level of impact seen the breadth of companies doing
are listed on the next page. Winners or sustainability in their businesses.” well. It’s been just very narrow.”
were announced on May 11 during the Sustainability assets have surged on the
Envestnet Advisor Summit, held this year platform, Clift stated. “And the number of THIS YEAR’S FINALISTS
in Charlotte, North Carolina. The win- products available also has increased dra- The finalists for the 2022 awards
ners will be showcased in the July/August matically.” He added that advisor interest have been culled from thousands on
issue of Investment Advisor as well as in has “also grown significantly.” the Envestnet platform by a group of
articles and videos on ThinkAdvisor. Indeed, many of the managers selected analysts, rated by category and then
This year brought not only growth in “traditional” categories actively par- reviewed by the judging committee.
in candidates from the 21,000 products ticipate in sustainability as well. In fact, To be considered for an award, the

22 INVESTMENT ADVISOR JUNE 2022 | ThinkAdvisor.com