WisdomTree has teamed up with fixed income specialists PIMCO to launch three ETF model portfolios aimed at US-based investment advisors.
Tom Skrobe, WisdomTree Head of Client Solutions.
Catering to three distinct investor risk profiles, from conservative to aggressive, the portfolios provide globally diversified multi-asset exposure.
The conservative portfolio targets an asset allocation mix of 20% equities/80% fixed income; the moderate portfolio targets 60% equities/40% fixed income; and the aggressive portfolio targets 80% equities/20% fixed income.
The equities portion of each portfolio will be built using WisdomTree’s smart beta equity ETFs, while the fixed income portion consists of PIMCO’s actively managed fixed income ETFs.
“We’re thrilled to collaborate with PIMCO, a leader in fixed income investing, to provide advisors with best-in-class model portfolios,” said Tom Skrobe, WisdomTree Head of Client Solutions. “WisdomTree is focused on developing solutions that align with advisor preferences – for instance, we know advisors typically prefer to use investment products from multiple managers and, as a result, we’ve prioritized taking an open architecture approach when it comes to our models.”
Eric Mogelof, Head of US Global Wealth Management for PIMCO, added, “We are excited that ETFs from PIMCO’s suite will be included in WisdomTree’s models. We believe that financial advisors will benefit from this collaborative effort.”
WisdomTree does not charge a strategist fee for these models; however, investors will need to pay the costs on the portfolios’ underlying ETFs. The average weighted expense ratio for the three models ranges from 0.37% to 0.43%.
The portfolios will be seeking to tap into growing demand from financial advisors for model portfolios that are created in-house or by third-party asset managers. There are a variety of reasons an advisor may want to use model portfolios as a resource as they seek to achieve their clients’ financial goals. Even with sophisticated in-house tools and expertise, building and analyzing portfolios can take a significant amount of time and other aspects of an advisor’s services can often take higher priority.
Skrobe continued, “ETF model portfolios allow advisors to access cutting-edge portfolio construction tools with the potential ability to manage assets in a more efficient way. As a result, advisors can spend more time building quality relationships with clients and prospects.”
The ETF model portfolios are available in the US in the Model Market Center on TD Ameritrade’s Institutional Platform and through AdvisorEngine.
WisdomTree notes it is under no contractual obligation to include PIMCO’s own ETFs within the portfolios. Any current allocation to PIMCO ETFs may change at any time and without notice to PIMCO.