Envestnet Celebrates a Decade of Direct Indexing Brilliance with Quantitative Portfolios


BERWYN, PA — Envestnet, Inc. (NYSE: ENV) marked a significant milestone recently: a decade since the innovation of its game-changing Quantitative Portfolios (QPs). This suite of direct indexing solutions, initially introduced as a unique passive investment technique, swiftly became a preferred strategy within their ecosystem, allowing for both tax management and portfolio customization.

Brandon Thomas, Envestnet’s Co-Founder and Co-Chief Investment Officer, remarked, “Since the debut of our first QP, direct indexing has grown popular as an effective separate account strategy across our ecosystem. Our QPs help advisors meet distinct investor needs often overlooked by traditional ‘one-size-fits-all’ investments.”

At the twilight of 2023, Envestnet stood as a leading figure in direct index separately managed account providers, with QP assets surpassing $9 billion. The company credits this success to their ability to meet an escalating demand for specialized investment strategies, while continuing to innovate on their industry-leading platform.

Envestnet’s QPs offer advisors a transformative alternative to traditional passive investing. These bespoke asset class-specific investments blend the advantages of “beta” investing with the customization afforded by managed accounts, enabling investment portfolios to reflect specific objectives. Interestingly, these portfolios saw a 40% annual growth in advisors and accounts in the last three years.

Looking at the wider market, Cerulli lends added weight to this achievement by predicting a 12% growth in direct index assets over the next four years. This growth trajectory far outpaces mutual funds and ETFs, signifying a clear shift in the investment landscape.

The QP suite comes in four flavors, each designed to optimize after-tax and risk-adjusted results cost-effectively. The Market Series QPs offer low-cost access to key market segments with enhanced customization flexibility. At the same time, Factor-Enhanced QPs aim for excess returns via increased exposure to prominent asset pricing factors.

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Sustainable QPs focus on companies with high sustainability ratings or strong environmental, social, and governance priorities. Conversely, Fixed Income QPs target investment-grade bond universe constituents, providing dependable income from a diversified securities set.

“Envestnet has stayed one foot ahead in the ongoing evolution of direct indexing solutions,” said Dana D’Auria, CFA, Co-Chief Investment Officer and Group President of Envestnet Solutions. “We are pleased to celebrate 10 years of providing QPs, our direct indexing solutions, to advisors. The increasing demand for these products aligns with industry trends, and we anticipate continued growth.”

Celebrating 25 years of service in the wealth management industry, Envestnet continues to transform financial advice delivery through its ecosystem of innovative technology, advanced insights, and broad-ranging solutions. With over $5.8 trillion in platform assets and a vast network of advisors and institutions, Envestnet remains a pivotal force in the wealth management industry.

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