Forward-looking research drives new ETF models

Independent platform provider Praemium has added three new strategic asset allocation (SAA) exchange traded fund (ETF) model portfolios to its SMA platform from AltaVista research.

The SAA portfolios can deliver above-benchmark returns because they are rules-based, driven by AltaVista’s forward-looking, fundamentals-based research, according to AltaVista.

The investment management fee across all three portfolios is 0.15 per cent.

Praemium Commercial Director Andrew Varlamos welcomed the addition of the new portfolios, saying Praemium strives to provide advisers with greater choice and flexibility.

“AltaVista’s ETF Model Portfolios offer advisers an innovative approach to addressing their clients’ needs,” he said.

AltaVista head of sales and corporate development Michael Turner told ifa the research process behind the models uses quantitative analysis to factor in what the market believes and increase the chance of outperforming the benchmark.

The process looks at expected income, underlying price to earnings ratios, and other investment metrics that an analyst would consider when assessing stocks, he said. “All that material and those data points are what we capture and what we use to optimise the portfolios, moving forward,” he said.

This means the models don’t make intra-term tactical allocations, which would be akin to admitting you got the allocation wrong in the first place.

The portfolios suit investors who want to invest over the longer term but with lower input costs, investment transparency and very low turnover, according to AltaVista.

The models will be available both on-platform and direct to adviser, Mr Turner said.

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