Cantor Fitzgerald acquires ETF strategist Efficient Market Advisors

Mar 28th, 2017 | By | Category: ETF and Index News

Cantor Fitzgerald Investment Advisors (CFIA) has announced the acquisition of the asset management businesses of Efficient Market Advisors (EMA), a registered investment advisory firm and leading ETF strategist platform with approximately $1.1 billion in assets under advisement.

Herb Morgan, Founder, CEO and CIO of Efficient Markets Advisors.

Herb Morgan, Founder, CEO and CIO of Efficient Markets Advisors.

The San Diego based asset management platform will operate with the same team that previously served at EMA and will continue to be led by Herb Morgan, Founder, CEO and CIO of EMA, in his role as Senior Managing Director and Chief Investment Officer of the Efficient Market Advisors division of CFIA.

Herb Morgan commented: “We are thrilled to join forces with one of the world’s most storied and dynamic financial service brands and marry our sought-after investment approach with the depth and breadth of Cantor Fitzgerald’s financial services platform and proven reputation.”

Shawn P. Matthews, CEO of Cantor Fitzgerald & Co, added: “With this transaction, we continue the build out of our asset management business, which is an important element of the overall strategic direction of our firm. We fully expect our customers to benefit from the increasing breadth of our asset management offering.”

Founded in 2004, EMA constructs proprietary investment portfolios using low-cost, tax-efficient, liquid and transparent ETFs. Utilizing in-house and third-party research, EMA’s proprietary ETF portfolios offer investors highly-diversified multi-asset exposure.

The firm bases its portfolio construction process on modern portfolio theory, seeking to create ‘optimal’ portfolios – those which maximize return for a given level of risk. Underpinning modern portfolio theory is a belief that markets are generally efficient at distributing and incorporating information into security prices. As such the strategies focus on passive security selection but seek to generate value from active asset allocations.

EMA offers five categories of portfolios based on the client’s investment time horizon. The 2-5 years, 6-10 years, 11-19 years and 20+ years portfolios provide solutions based on the term until the client needs to begin spending their investment. The ‘taking income’ portfolios are designed for clients already in this phase of their investment cycle. Each category contains three portfolios tailored to suit different investor risk tolerances by offering either conservative, moderate or aggressive strategic asset allocations.

Within each portfolio there may be allocations to large cap stocks, mid cap stocks, small cap stocks, international stocks, intermediate investment grade taxable bonds, short term (1-3 years) US government bonds, real estate and cash.

Additionally, EMA has created a ‘dynamic volatility’ portfolio – a liquid alternative investment vehicle that when used in conjunction with one of the traditional 15 strategies has the potential to increase expected returns while lowering expected risk of the total portfolio. It does this by capturing returns from movements in the VIX Index. The strategy’s main objective is to provide negative correlation to traditional asset classes.

“We are excited to have the EMA team and platform join our growing asset management business,” said Dave Goldfarb, Senior Managing Director of CFIA. “EMA has a 12-year track record in providing ETF based investing strategies and solutions to its clients. Combining EMA’s capabilities with Cantor’s robust global distribution, infrastructure and capital markets expertise, will significantly strengthen our asset management platform. We both share a common strategic vision and goal of providing exceptional service to our clients and that will continue to be our collective focus.”

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