ActivePassive Portfolios

[Pages:2]ActivePassive Portfolios

The next generation of portfolio construction

What's the best approach to asset management: active or passive? Although neither strategy is "best", an appropriate blend of active and passive solutions can help to deliver the best of both worlds.

Our goal: To optimize benefits, and limit challenges

Envestnet | PMC's ActivePassive Portfolios provide what we view as an ideal combination of active and passive investment strategies: pairing actively managed mutual funds with low-cost, tax-efficient index funds.

Benefits Challenges

Active Management

Passive Management

? In-depth analysis by experienced investment professionals ? Upside potential--seeks to achieve returns in excess of the index ? Downside protection--seeks to act defensively during market downturns and periods of uncertainty

? Generally, low management fees ? Ability to capture similar performance to the index

? Higher fees and operating expenses ? Poor security selection or sector allocation decisions may impair returns

? No ability to generate alpha over index returns ? Limited downside protection

Blending two opposing, yet complementary, investment styles

Sample Portfolio Allocations

Diversified Equity

98% Stock 2% Cash

16% International Equity 7% Small Cap 36% Large Cap 39% Global Equity 2% Cash

Balanced

55% Stock 43% Bond 2% Cash

30% Intermediate Bond 3% High Yield 9% International Equity 28% Large Cap 5% International Bond 23% Global Equity 2% Cash

Conservative Income

20% Stock 78% Bond 2% Cash

64% Intermediate Bond 5% High Yield 9% Large Cap 11% Global Equity 9% International Bond 2% Cash

These charts represent sample allocations for the ActivePassive Diversified Equity, Balanced, and Conservative Income Portfolios.

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ActivePassive Portfolios

The next generation of portfolio construction

Professionally managed portfolios across the risk spectrum

The ActivePassive Portfolios are designed for various investor risk profiles, ranging from aggressive to conservative. Key Features ? Disciplined manager selection ? Sophisticated active vs. passive research ? Tax-sensitive portfolio options ? Regular monitoring and rebalancing

ActivePassive Portfolio Series

Diversified Equity

Equities

98

Fixed Income

2

*Tax-sensitive portfolio options available

Diversified Equity w/ Income

83

17

Balanced Equity

72

28

Balanced 59 41

Diversified Income

46

54

Income 30 70

Conservative Income

15

85

Disciplined Manager Selection

Active Component When selecting active investments, PMC assesses: Performance: Returns are evaluated on a rolling basis Risk-Adjusted Performance: Returns achieved must reflect the appropriate level of risk Consistent Style: Managers must adhere to their stated investment objectives Quality: Managers' firm, staff, and investment processes must meet PMC standards

Passive Component

When selecting passive investments, PMC assesses: ? Expenses ? Liquidity and fund size ? Tax efficiency ? Tracking error (how closely the index matches the performance of

the underlying benchmark) ? Compatibility with the active component of the portfolio

The information, analysis, and opinions expressed herein are for general and educational purposes only. Nothing contained in this brochure is intended to constitute legal, tax, accounting, securities, nor investment advice, nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type. All investments carry a certain risk, and there is no assurance that an investment will provide positive performance over any period of time. An investor may experience loss of principal. The asset classes and/or investment strategies described may not be suitable for all investors and investors should consult with an investment advisor to determine the appropriate investment vehicle. Investment decisions always should be made based on the investor's specific financial needs and objectives, goals, time horizon, and risk tolerance. Past performance is not indicative of future results.

Investments in smaller companies carry greater risk than is customarily associated with larger companies for various reasons such as volatility of earnings and prospects, higher failure rates, and limited markets, product lines or financial resources. Investing overseas involves special risks, including the volatility of currency exchange rates and, in some cases, limited geographic focus, political and economic instability, and relatively illiquid markets. Income (bond) funds are subject to interest rate risk, which is the risk that debt securities in a fund's portfolio will decline in value because of increases in market interest rates.

Neither Envestnet, Envestnet | PMCTM nor its representatives render tax, accounting or legal advice. Any tax statements contained herein are not intended or written to be used, and cannot be used, for the purpose of avoiding U.S. federal, state, or local tax penalties. Taxpayers should always seek advice based on their own particular circumstances from an independent tax advisor.

FOR ONE-ON-ONE USE WITH A CLIENT'S FINANCIAL ADVISOR ONLY.

?2015 Envestnet, Inc. All rights reserved.

PMC-FS-AP-0415

For more information, go to

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