Dimensional Fund Advisors, an Austin, Texas-based $719 billion funding supervisor that sponsors ETFs, mutual funds and individually managed accounts, is rolling out a brand new unified managed account platform subsequent month.
The UMA platform—an enlargement of Dimensional’s SMA capabilities that launched two years in the past—will allow advisors to handle investments together with Dimensional’s 38 ETFs, greater than 1,500 accredited third-party ETFs and Dimensional’s 9 present SMA methods in a single interface. The brand new performance will formally launch on July 8. (FundFire first reported the information final week.)
“A singular side of what we’re providing is that we’re an asset supervisor offering the SMA and the ETF mannequin tax-management overlay, which facilitates tax administration throughout the sleeves,” stated Kaitlin Hendrix, asset allocation analysis director and vice chairman, Dimensional Fund Advisors. “If you happen to generate a loss whereas rebalancing throughout the ETF sleeve, you possibly can notice a acquire whereas rebalancing throughout the SMA for a internet impartial occasion. By having the identical asset supervisor managing the SMA and UMA, all of the items can work effectively collectively to get the portfolio nearer to focus on.”
The UMA platform will permit advisors to construct ETF-only portfolios with Dimensional and non-Dimensional ETFs or mix ETFs with direct particular person securities in single accounts. It is going to additionally ultimately add help for mutual funds. Dimensional’s system will handle day by day asset allocation, tax issues and money balances.
The enlargement in performance aligns with broader developments of advisor adoption of UMAs.
“That is about getting in sync with the truth that advisors want to have the ability to work throughout everything of a consumer’s portfolio with the intention to correctly execute the overlay providers comparable to portfolio development, tax-loss harvesting, direct indexing and the like,” stated Neil Bathon, founder and accomplice at FUSE Analysis Community. “Frankly, I’m stunned that they had not already attended to this essential enhancement to the platform.”
Advisors can use ETFs and Dimensional SMAs to customise fairness and glued revenue allocations, and regional focuses. SMAs throughout the platform will be personalized for particular person tax administration wants, ESG issues in addition to particular person inventory, trade, sector, or nation preferences.
Placing a number of investments into UMAs can permit for extra environment friendly tax loss harvesting, gifting and money wants throughout a set of investments. Developments in expertise, alongside elevated expertise with utilizing the methods, have enabled UMAs to be provided to traders at decrease minimums. Prior to now, UMAs have been solely out there to high-net-worth traders with minimal accounts of $20 million or extra. However Dimensional’s present SMAs and the brand new UMA are open to traders with minimal account sizes of $500,000.
“Dimensional has over 20 years in experience in managing funds of funds and complex tax administration accounts. It may be fairly advanced,” Hendrix stated. “Know-how is a part of it, but in addition now we have the experience to make use of the expertise to ship investor outcomes.”
At present, greater than 200 advisors managing 900 accounts use Dimensional’s SMAs. They may have entry to the UMA features.
