6 | Envestnet | PMC Investment Methodology Guide FOR ONE-ON-ONE USE WITH A CLIENT'S FINANCIAL ADVISOR ONLY
PMC conducts an annual, six-step process, using statistically advanced techniques to combine information
coming from theory, data, forecasts by recognized economic analysts, and PMC's own views into overall
estimates of the CMAs.
STEP 1 STEP 2 STEP 3 STEP 4 STEP 5 STEP 6
Estimating
Standard
Deviations
and
Correlations
Theoretical
Model:
Reverse
Optimization
Researcher
Views: Equity
Researcher
Views: Fixed
Income
Putting it All
Together:
Black-
Litterman
(Bayesian)
Process
Expected
Return
Forecasting
for
Alternative
Asset Classes
1 2
PMC Research
Every facet of PMC's services is backed by methodology steeped in sound
fundamental theory and disciplined execution. Beginning with market views,
asset allocation, and investment selection, and culminating with due diligence
monitoring, PMC has established a thorough, consistent, and transparent
methodology.
PMC's research is incorporated in the platform in two primary ways:
Capital markets assumptions (CMAs)
and asset class portfolios (ACPs)
support portfolio construction and risk
scoring methodology.
Evaluations, approvals, and research
statuses assigned to portfolios and other
investment products. More granular
research attributes and content are
available to enterprise clients that opt for
CIO Support and Investment Consulting
Services.
