CHICAGO, Dec. 13, 2012 /PRNewswire/ -- Envestnet | PMC (PMC), the portfolio management consulting division of Envestnet, Inc. (NYSE: ENV), has released a new white paper, New Choices for New Challenges: The Case for Liquid Alternatives, to help advisors better understand how liquid alternatives can offer investors a level of diversification not readily available from more traditional asset classes, and potentially shield portfolios from the worst effects of market swings. In addition, liquid alternatives provide a range of benefits not found in traditional alternatives products, including daily liquidity, greater transparency, cost and tax efficiencies, and lower investment minimums.
Envestnet, a leading provider of innovative investment and practice management solutions for financial advisors, and PMC launched the Paradigm Liquid Alternatives Portfolios in 2012, offering advisors a straightforward framework for constructing and delivering diversified portfolios that take advantage of liquid alternatives strategies. Paradigm Liquid Alternatives Portfolios were created in response to advisors' need for more effective diversification methods to help protect client portfolios from market extremes and preserve wealth.
"With traditional asset classes becoming increasingly correlated, and therefore more vulnerable to market swings, many investors recognize they have to 'diversify harder' to achieve the portfolio protection they need," said Brandon Thomas, Chief Investment Officer at Envestnet | PMC. "We believe liquid alternatives are crucial tools for investors looking for this diversification effect – and our Paradigm approach helps advisors put these tools to work."Unlike other liquid alternative offerings, which focus on a single strategy, Paradigm Liquid Alternatives consists of three diversified portfolio approaches—the Fixed-Income Complement, Equity Complement and Portfolio Diversifier, an all-purpose, "all-season" model designed to minimize a portfolio's overall shortfall risk. All three are specifically focused on client goals, with each portfolio employing multiple liquid alternative investment vehicles.