Chapter 11 Flashcards
What are the three main categories of portfolio solutions?
- Balanced funds - which are a single fund designed to meet the needs of a pool of investors with similar objectives
- Fund wraps - which provide a portfolio of funds that meet the needs of a pool of investors with similar objectives
- Managed accounts - which are tailored to a specific investorPo
What is portfolio allocation services?
This allows the investor to select from a predetermined model portfolio.
Define managed wrapped accounts.
Similar to fund wraps except the investor actually owns the underlying assets held in the fund directly.
What are some of the factors that should be considered when determining what is most appropriate for the client?
- Account size
- Need for customization
- Due diligence requirements
- Third-party consulting
- Asset allocation styles
- Automatic rebalancing
- Investor services support
What does absolute return not factor into to?
Time
What is performance attribution analysis?
Involves dissecting and analyzing different components of a portfolio.
What is overlay management?
Combines several managed products (and in turn multiple portfolio managers) into a single account controlled by single authority.
What are two primary reasons for the growth in overlay management?
- Increased complexity in the financial market
- Better time and resource allocation
What are some of the other holistic wealth managements services that are offered?
- Financial planning
- Insurance
- Business and estate planning
- Limited partnerships
- Hedge funds
- Tax-planning services
What fund types are the least to most customizable?
- Balanced funds - $500 to $100k (all below typical minimums)
- Fund Wraps - $500 to $100k
- Non-discretionary managed accounts - $25k
- Advisor-managed accounts - $100k to $250k
- Managed wraps - $150k
- Separately managed accounts (SMAs) - $500k to $1m
