THE BLOG

29
Jun

Don’t Let Orion Ascent Early Bird Pricing Fly By!

Orion Ascent Early Bird pricing comes to an end tomorrow. Don't let this deal on our national user conference fly by before you register!

The post Don’t Let Orion Ascent Early Bird Pricing Fly By! appeared first on Orion Advisor Services.

27
Jun

Simplify ADV Reporting, View Moody’s Ratings, and More with These New Software Updates

Explore features from our May software update that will streamline your performance. Learn how to simplify ADV reporting, view Moody's ratings and more.

The post Simplify ADV Reporting, View Moody’s Ratings, and More with These New Software Updates appeared first on Orion Advisor Services.

22
Jun

How to Build Your Digital Client Experience with Orion’s Tech Solutions

Watch today's video to learn about using our tech to build a digital client experience, and get more info on one of our Orion Ascent 2017 learning trails.

The post How to Build Your Digital Client Experience with Orion’s Tech Solutions appeared first on Orion Advisor Services.

21
Jun

Providing a robo-advisor experience without using a robo

robo-advisor experience

It’s possible for advisory firms to provide a robo-advisor experience without using a robo. In today’s post, we show you how.

The post Providing a robo-advisor experience without using a robo appeared first on Orion Advisor Services.

20
Jun

Providing a robo-advisor experience without using a robo

providing a robo-advisor experience

It’s possible for advisory firms to provide a robo-advisor experience without using a robo. In today’s post, we show you how.

The post Providing a robo-advisor experience without using a robo appeared first on Orion Advisor Services.

15
Jun

Higher Calling: Simon Peter O’Hanlon, Preferred Financial Strategies

CLS sits down with financial advisor Simon Peter O’Hanlon, Preferred Financial Strategies, as he tells us how he hopes that his clients see him as a counselor that is there to help them through not only good times, but bad times.

15
Jun

Choose Your Learning Path at Orion Ascent 2017

In today's Orion Weekly, learn more about the Client Experience track at Orion Ascent 2017 and then choose your own Learning Path.

The post Choose Your Learning Path at Orion Ascent 2017 appeared first on Orion Advisor Services.

14
Jun

Higher Calling: David Stevens, Irongate Financial Services

CLS sits down with financial advisor David Stevens, Irongate Financial Services, where he explains why creating strong client relationships is the reason he became a financial advisor.

13
Jun

Common Performance questions: What to do when your Blended Benchmark calculations don’t add up

In today's post covering Common Performance Questions, we'll look at what to do if your manual Blended Benchmark calculations don't match the performance calculated by Orion.

The post Common Performance questions: What to do when your Blended Benchmark calculations don’t add up appeared first on Orion Advisor Services.

09
Jun

Optics: Digging Deeper into American Funds

Content provided by Case Eichenberger, CIMA, Client Portfolio Manager

CLS’s American Funds strategies have grown two-fold in the last year or so. That success brings on new advisors, clients, and relationships. As more new people use our strategies, we receive more due-diligence questions addressed to our portfolio management (PM) team.

One such question that has come up lately regards asset allocation and the funds we select. Optics, or how a portfolio appears, is very important to us when explaining to a client that this portfolio follows our themes, outlooks, and continuums. We can do this very easily with exchange traded funds (ETFs) as they have zero style drift and follow a very specific index. But with mutual funds, such as American Funds from Capital Group, it takes a little more strategy. American Funds’ PMs have a fair amount of flexibility and freedom. For example, the Growth Fund of America can take 25% of its portfolio and invest outside the U.S. This is why it is important to have a manager such as CLS to make sure these essential traits are tracked.

On to the question: CLS says it likes emerging market stocks and is overweight to this sector, but when my client pulls up his statement, he sees emerging markets allocated only 5%. When he has a 100 Risk Budget, how can that be?

 

The answer: Third party research providers, such as Morningstar, which CLS uses to classify funds, have a tough time fitting every mutual fund into a nine-box style grid. Looking at the New Economy fund, the flexibility of American Funds’ PMs allows them to go into emerging market stocks, even though Morningstar, for example, classifies the fund as “large growth.”

The below is a sneak peek at our process.

 

 

  • Notice the total percentage stock of the portfolio is about 90% (top bold number). This is because mutual funds must hold some cash on hand for redemptions and other reasons, such as finding a good place to invest.
  • Of that 90%, 18% is invested in emerging markets (EM) — a far cry from 5%!
  • How does that work? Many of the funds invest in EM stocks, but not enough to be classified that way by research providers.
    • Take our example of New Economy, which fits in the large-cap growth style box. It has 21% of its stock invested in EM, which makes a material impact on performance.
    • Another good example is EuroPacific Growth. The name suggests it invests in Europe and Japan and is mostly a developed international fund with limited exposure to emerging markets. But, that is not true. This fund has 37% of its stock invested in EM companies along the Pacific, which is a big reason it has outperformed developed and total international stocks so far this year.

CLS keeps a close eye on where these funds go and how they play out in the total portfolio. We like EM and our American Funds strategies reflect that accordingly. The challenge comes when research providers place flexible funds, such as American, in a single bucket, which can make the optics look poor.

2637-CLS-6/7/2017