My first meeting of the trip was out in Waltham at broker-dealer Commonwealth Financial Network.
There, I met with Peter Essele, Chris Fasciano, Mick Comiskey and Andrew Kitchings (below), who are a part of the preferred portfolio services select team.
Led by Brian Price, a friend of the magazine and a former cover star, the team is responsible for putting together the firm’s mutual fund wrap platform of 160 mutual funds and 80 ETFs. Some of these funds then make up the firm’s 55 multi-asset model portfolios, which have about $7 billion in assets.
The models’ risk exposures range from 80% fixed income and 20% equity to all equity, which is made up of 97% equity and 3% cash. There are then a number of variations, such as those using municipal bonds or liquid alternatives, or those targeting ESG. The latter was launched in 2010 and has attracted $130 million in assets. All told, the models are used by 1,350 of the 1,800 advisors in the network.
The team currently has a favorable view of international markets and increased allocations in the portfolios at the start of the year to reflect this. Other January trades included upping small-cap value exposure, reflecting the team’s preference for value over growth across market caps and geographies. On the fixed income side, they shortened duration and reduced exposure to credit sectors.
None of the portfolios currently include smart beta ETFs, but the team is considering how such funds would fit in.
Next, I headed to downtown Boston to catch up with Tim Kaijala (above), director of investment research at O’Brien Wealth Partners.
The RIA was founded in 1986 and now manages just under $1 billion in assets for 400 families around the North East. Kaijala is responsible for building the firm’s recommended list of funds, which is used to populate its model portfolios.
Kaijala told me: ‘We haven’t made any major allocation changes over the past year, but we shifted out of corporate bonds on the fixed income side and transitioned to an Asia-specific manager in emerging markets equities. We are now focusing on the alternative space to find uncorrelated assets as a differentiated source of alpha for our clients.’
Currently, Kaijala finds the emergence of interval funds in the alternatives space interesting, as they give access to niche investments in a more liquid wrapper.
My next meeting was with York Lo (below), product development director at John Hancock Investments.
Lo joined the investments team at Hancock in 2008. The team is led by Leo Zerilli and consists of 61 people who are responsible for manager selection and due diligence on the subadvisors used in John Hancock Investments’ 116 strategies. These currently account for $156 billion in assets under management. Of these strategies, 46 are managed by Manulife Asset Management, while the remainder are run by 27 external managers. Lo reports to Phil Fontana, who is head of product development. A team of four under Fontana is now focused on new lines of business and product launches.
Lo was responsible for launching the firm’s ETF business in 2015 in partnership with Dimensional Fund Advisors and also led the search and launch effort for a number of mutual funds. That includes the highly successful John Hancock International Growth Fund, which is subadvised by Wellington Management and recently soft closed at $9.5 billion.
Lo said: ‘We are always on the lookout for good managers in capacity-constrained asset classes such as US small and mid caps and non-US equities. We are also looking at expanding our alternatives franchise, not just in the liquid space but also in the less liquid space through interval funds and limited partnership structures, where we are seeing increasing demand from investors for truly uncorrelated strategies, especially as market volatility increases at this stage of our almost decade-long bull market.’
After grabbing a quick lobster roll and clam chowder (when in New England!), I met with Carlos Shigueta, director of manager research and selection at Aureus (below).
Aureus was founded in 2005 and manages more than $2 billion in assets for families and small organizations. Shigueta is responsible for picking the external managers implemented in the client portfolios at the RIA. There are 13 people at the firm, including eight on the investment committee. Aureus offers both in-house stock strategies and external managers, running hedge funds, mutual funds and ETFs.
Before heading back to New York, I caught up with former cover stars John Tennaro and Scott Burg and the team from CIBC Atlantic Trust at a local Irish pub (below). What a way to end a great trip!