The Power of Rules: Model Portfolios and Wealth Management
Research Paper
August 14, 2024
Preview
More wealth clients are seeking customization of their investment portfolios. In response, growing numbers of wealth managers are turning to model portfolios to offer personalization within a scalable business model. A rules-based approach could play a critical role in effectively delivering client-personalized solutions at scale.
We examine the potential benefits for model managers and financial advisers of a rules-based model-portfolio construction and management process and compare it to a less-systematic, traditional approach. In our analysis, model managers allocate to tech stocks between the rise of ChatGPT, at the end of November 2022, and June 2024.
Within the parameters of our analysis, rules-based and traditional methods for making tactical-allocation decisions in model portfolios produced similar performance and AI exposures. The primary difference between the two is that the rules-based approach would be more likely to meet the challenges of model-portfolio management with a greater degree of transparency and efficiency. The importance of addressing these challenges is growing with the heightened demand for customization by wealth-management clients.
Rules-based management of model portfolios can help meet five key challenges for wealth managers
*Model managers include CIO team, asset managers and broker/dealers.
Read the full paper
Read the full paper
Provide your information for instant access to our research papers.
A Roadmap to Personalizing Model Portfolios: Scaling with Purpose
High-net-worth investors are seeking portfolios tailored to their financial goals, personal values and tax situation. Wealth managers need scalable solutions. We explore using factor, thematic and sustainable investing to customize portfolios.
Quantitative Investment Solutions
MSCI Quantitative Investment Solutions (QIS) offer hosted, scalable, and easy-to-integrate optimization solution that Asset Managers can use to help construct tax optimized and personalized portfolios in line with each of their clients' financial objectives.
MSCI Fabric
MSCI Fabric is a wealth technology platform specializing in portfolio design, customization and analytics for wealth managers and advisors.
The content of this page is for informational purposes only and is intended for institutional professionals with the analytical resources and tools necessary to interpret any performance information. Nothing herein is intended to recommend any product, tool or service. For all references to laws, rules or regulations, please note that the information is provided “as is” and does not constitute legal advice or any binding interpretation. Any approach to comply with regulatory or policy initiatives should be discussed with your own legal counsel and/or the relevant competent authority, as needed.