Issue link: https://resources.envestnet.com/i/1527493
6 FOR ONE-ON-ONE USE WITH A CLIENT'S FINANCIAL ADVISOR ONLY © 2024 Envestnet. All rights reserved. Asset Class Portfolio Update "PMC Core", and "PMC Concentrated" ACPs. The difference between them is the size and value breakouts of the domestic equity with "PMC Diversified" having large/small cap and value/growth splits; "PMC Core" having value/growth splits only for large cap, but core allocation for the small cap; and "PMC Concentrated" having only large and small cap core exposures. There are three main uses of PMC Standard Portfolios: 1. As reference portfolios for use in risk scoring on the Envestnet platform (see "Risk Scoring on the Envestnet Platform" white-paper for details). 2. As the basis for various managed solutions (e.g., Sigma Mutual Fund Solution, PMC Strategic ETF Solution, PMC Select Strategic Portfolios, Enterprise Solutions, etc.) and PMC's consulting framework. 3. As starting positions for asset allocation portfolios provided via the platform to advisors, who can then further customize these according to their needs. PMC Standard Portfolios consist of domestic equity, domestic fixed income (intermediate and short bonds), international developed equity, and international developed fixed income asset classes. The reasoning for selecting these asset classes is two-fold. First, we want the selected asset classes to represent most of the market capitalization in the world portfolio. Domestic equity and fixed income combined with developed equity and fixed income represents 111 trillion of market capitalization (as of the beginning of 2022), which is about 22 percent of the market capitalization of the world portfolio. Second, we want the PMC Standard Portfolios to represent long-term strategic allocations, where the choice of the diversifying asset classes is not a function of tactical or dynamic decisions (e.g., including asset classes as a result of relative underpricing or momentum considerations), but rather serves as a strategic foundation for the overall portfolio. This is especially important for the risk scoring and managed solutions uses of PMC Standard Portfolios mentioned above.