Adviser platform Hub24 has introduced a portfolio management tool that allows portfolio managers to adjust their managed portfolios to respond to market conditions.
The tool, called Progressive Portfolio Implementation (PPI), allows different target weightings to be set for new inflows and gives portfolio managers the ability to allocate the new client money differently to the existing portfolio, substituting into alternative securities in line with set investment goals.
PPI will allow portfolio managers to implement the decisions across all investors within a managed portfolio. This also means clients may not have to pay as many transaction fees.
Hub24 director of strategic development Jason Entwistle said the tool had the potential to boost portfolio performance for clients, particularly in the first few years they are invested.
“Managers receiving new inflows from investors normally have to buy all the holdings to match the existing weightings of their portfolios and are then forced to sell some of those recently purchased assets shortly after to adjust to the new weightings,” Entwistle said.
“With PPI, however, managers can manage those inflows more efficiently in anticipation of highly probable changes.
“PPI may help enhance performance as portfolio managers don’t have to purchase securities at peak valuation for new funds and can also deliver tax efficiencies for investors by not having to sell securities before their time.”
The functionality is now live and is being used by Akambo Financial Group to manage its portfolios. It will be rolled out to other portfolio managers over coming months.
