Page 30 - Investment Advisor July/August 2021

2021 Asset Managers and Strategist of the Year Awards

Strategist & Overall Manager of the Year
WestEnd Advisors

t’s nearly impossible to prepare for ties — from Vanguard, BlackRock and State
Ia black swan event like the market Street. “ETFs from the big three can give
sell-off in March 2020 when the coro- us the exposure we need,” Durden says.
navirus pandemic slammed global stock Four of the five strategies hand-
markets and froze U.S. bond markets ily beat their benchmarks in 2020, with
until the Federal Reserve intervened. gains ranging from 27% to 56% above
But WestEnd Advisors was ready for the performance of those benchmarks.
the turmoil. The boutique investment The firm’s Global Conservative topped
firm was defensively positioned, more its benchmark by a little more than 9%.
heavily weighted with health care, utili- WestEnd Advisors’ investment pro-
ties and consumer staple stocks, and had cess starts with an overview of the mac-
no exposure to sectors such as energy, roeconomy, using over 200 economic
industrial materials and financials. data points for the U.S. and around the
“Our concern entering 2020 and see- Ned Durden world. The firm uses the economic data
ing the economic data indicating moder- it collects to develop outlooks 12 to 18
ate growth was that the market seemed Title: Chief Investment Strategist months in the future. “If you get too close
to be pricing in a reacceleration of eco- Years with firm: 15 in, around six months, a lot [of the poten-
nomic growth,” says Ned Durden, the Years in financial services: 24 tial move] is priced in,” Durden says.
chief investment strategist. “If growth For the U.S. market, the firm invests in
didn’t reaccelerate ... we could be expe- up to six of the S&P 500’s 11 sectors at any
riencing a difficult time for returns. And Investment/asset class focus: one time; the strategy will end up owning
then the pandemic hit. Most economi- Forward-looking, high-conviction all 11 sectors over a full economic cycle.
cally sensitive sectors were hit the hard- multi-asset solutions For the international portion of its
est. Anticipating weaker growth allowed Firm name: WestEnd Advisors strategies, WestEnd Advisors uses the
us to protect investors on the downside economic data to overweight or under-
in the rapid drawdown.” Firm headquarters: Charlotte, weight major regions such as developed
After the dramatic sell-off, WestEnd North Carolina Europe and emerging Asia.
Advisors added economically sensitive Year firm founded: 2004 (when Average strategy turnover is about
sectors to portfolios, such as finan- purchased from employees from 30% a year, and the drivers of those
cials and industrials, adjustments that PowellJohnson) changes are the economic shifts, accord-
“proved to be well-timed and added to Number of employees: 24 ing to Durden. He describes the firm’s
returns,” according to Envestnet. employees, including seven partners turnover strategy as “between set-it-
The macroeconomic analysis, which and-forget-it and short-term tactical.”
drives the firm’s sector-focused equity AUA as of May 31, 2021: $15 billion The objective for all this: to maintain
and fixed-income allocation decisions, timely portfolios for advisors and their
sets it apart from its peers, according to Envestnet, which clients, he says. Low turnover also makes these strategies
awarded the firm two top prizes in this year’s Asset Manager tax-efficient.
and Strategist Awards: for the strategist category and for the For the Global Balanced Portfolio, which has outpaced its
overall winner. WestEnd Advisors beat out nearly 150 firms in benchmark in nearly 87% of rolling three-year periods since
the strategist category and declared the award winner for the its inception in January 2005, risk-modeling analytics suggest
overall prize. that the outperformance appears to reflect the “dynamic asset
The firm offers three major strategies: U.S. Sector, Global allocation decisions” that reinforce “the team’s purported skill
Equity, which marries U.S. sector with international alloca- set, “ according to Envestnet, citing “risk-modeling analytics.”
tions, and Global Balanced, which adds U.S. fixed-income allo- The investment team has five generalist members: three
cations to the Global Equity strategy, plus two other strategies: portfolio managers, including Durden, and two analysts.
Global Conservative and Large-Cap Core Equity. The success of WestEnd Advisors’ strategies has led to
All five are high-conviction strategies, and all but Large-Cap strong asset growth, which has nearly tripled in the past four
Core Equity are built with ETFs — rather than individual securi- years, according to Envestnet. —Bernice Napach

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