Russell Investments has extended its Enhanced Asset Allocation (EAA) capability to the retail market with the addition of Enhanced Model Strategies, which provide advisers with the ability to offer individual investors an opportunity to take advantage of market dislocations, and are now offered on the Stifel Nicolaus and Envestnet platforms.
According to the announcement, sizeable market shifts away from long-term averages create opportunities for potential incremental returns, and this information can be used to temporarily adjust or ‘tilt’ a portfolio from its long-term static Strategic Asset Allocation (SAA). Russell has used this EAA approach to actively advise investment consulting asset allocation shifts for more than 15 years.
A company representative stated that the newly launched strategy was developed by incorporating information from Russel’s proprietary valuation models, and is part of the evolution of Russell’s existing investment toolkit, not a radical overhaul of the firm’s investment philosophy or quick-fix reaction to recent market volatility.
Russell Enhanced Model Strategies will initially be offered to financial advisers who choose to implement them in portfolios using Russell Funds. As part of its diversified portfolio management approach, Russell is offering two separate model strategies with varying SAA exposure (60% equity and 40% fixed income, 80% equity and 20% fixed income), and will provide ongoing advice regarding what adjustments to implement and how frequently.