Issue link: https://resources.envestnet.com/i/1527492
FOR ONE-ON-ONE USE WITH A CLIENT'S FINANCIAL ADVISOR ONLY Envestnet | PMC Investment Methodology Guide | 17 and/or exchange-traded funds. Most strategist portfolios are risk-based, asset-allocated portfolios that are offered in various models across the risk spectrum. Additionally, unique tactical and style- specific strategist portfolios focus on traditional investment styles, asset classes, philosophies, risk tolerances, and portfolio attributes, or follow a more outcome-oriented mandate. To help better organize this growing space, the PMC Research team dedicates significant effort to classifying and categorizing third- party strategist solutions available to advisors on the Envestnet platform. These solutions range from traditional long-term, fully diversified buy-and- hold investment mandates and multi- asset portfolios offered across various risk tolerances, to style-specific or outcome-based portfolio solutions that employ unique investment techniques. PMC actively monitors and reviews strategists, and may add and/or remove strategist solutions at any time throughout the year. The PMC Strategist Research team's rigorous quantitative and qualitative research produces a thoroughly vetted roster of third-party investment managers, portfolios, and solutions that are well aligned with the demands of our clients and stand out from their peers. Although PMC's research and due diligence process is similar to that for SMAs and mutual funds, certain characteristics of these solutions and the lack of formalized peer groups and standardized benchmarks require a specialized process for strategist portfolios. To be eligible for the Approved List, strategist portfolios must submit both a Risk Score Questionnaire and a Strategist Due Diligence Questionnaire and undergo a Qualitative Analyst Assessment conducted by a PMC research analyst. The Strategist Due Diligence Questionnaire seeks to determine the following: • Firm and strategy information • Sales, marketing, and distribution capabilities • Firm governance structure • Firm and product asset history • Investment team • Investment philosophy • Investment process • Risk management • Composite information • Trading The Qualitative Analyst Assessment is derived from interviews (including conference calls and/or on-site visits) with senior management and key investment personnel to gain a better understanding of the firm's stability, key personnel, investment philosophy and process, performance metrics, risk controls, and product line-up. The following are core elements of the strategist due diligence: • compliance with all due diligence requests; • access and transparency into the firm, investment team, and investment process; • organizational stability and success; • quality and tenure of the investment team; • analyst conviction in firm, investment team, and investment process; • competitive historical performance; • unique attributes that correlate to the success of the strategist solution; and • multiple competitive advantages over peers. Upon completion of the evaluation process, strategist portfolios are eligible for various analyst-driven research statuses: "Available" or "Approved-Qualitative," with additional portfolio attributes as needed ("Select" and "Watch"). PMC Strategist Approval Process Contact us for more details: pmcconsulting@envestnet.com @