We research ETFs for you, striving to provide high levels of diversification across a variety of asset classes.

Our goals: Balanced risk and return, and greater efficiency

Strategic ETF Strategies offer a traditional, long-term strategic asset allocation at a lower cost

Looking to keep your costs low? The Strategic ETF Strategies are a straightforward, inexpensive way to include equity and fixed-income ETFs in your portfolio. 

These Strategies consist of strategic asset allocation models developed by SEI’s Portfolio Strategy Group1 that are generally comprised of exchange traded funds (ETFs) that attempt to achieve specific investment goals. The Strategies generally offer some exposure to international markets, but are more heavily invested in U.S. equity and fixed-income markets.

Tactical ETF Strategies use a more diversified, active approach in an effort to balance risk and return.

The Tactical ETF Strategies rely on SEI’s managers watching the market with an eye not only on rebalancing to maintain your asset allocation, but also adjusting your allocation in response to market changes — all while maintaining strict risk guidelines.

Your asset allocation may also be adjusted in response to changing expectations about market dynamics — all while SEI adheres to strict risk guidelines.

Tax-Managed ETF Strategies use different techniques designed to help reduce your tax liability.

To help manage the impact of taxes, the Tax-Managed ETF Strategies uses some of the following techniques:

  • Purchasing municipal fixed-income ETFs to create tax-exempt income
  • Controlling portfolio turnover levels to minimize capital-gain recognition
  • Selling ETFs with the least tax impact 
  • Selling securities that have unrealized losses and using the losses to offset realized gains in the portfolio — a technique known as tax loss harvesting

How we do it

We identify and select ETFs we believe offer the best chance of tracking to the index at the lowest cost, and assemble them into diversified portfolios – much like we actively research our money managers.

Criteria for evaluating ETFs

Criteria for evaluating ETFs: Expense, liquidity, and integrity of exposure

 

  • Is the ETF traded widely enough for us to transact in it without adversely impacting market pricing?
  • Does “shadow” liquidity in the market for the underlying asset class support trading in the ETF beyond what is evident in trading volumes, AUM?
  • Does the ETF offer the most cost-effective means of obtaining the required exposure?
  • Does the ETF deliver authentic exposure to the asset class or risk premium that is desired?

Portfolio Strategies Group is a team within SEI Investments Management Corporation (SIMC).

Legal Note

SEI Investments Management Corporation (SIMC) is the adviser to the SEI ETF Strategies. SIMC is a wholly owned subsidiary of SEI Investments Company. Please see SIMC’s Form ADV Part 2A (or the appropriate wrap brochure) for a full disclosure of the fee schedule.

There are risks involved with investing, including loss of principal. Diversification may not protect against market risk. There is no assurance the objectives discussed will be met.

Consider the SEI ETF Strategies’ investment objectives, risks, charges and expenses carefully before investing. The Strategies invest in exchanged-traded products (ETPs) to obtain the desired exposure to an asset class. A copy of each ETP’s prospectus is available upon request. The prospectus includes information concerning each fund’s investment objective, strategies and risks. The Strategies’ investment performance, because they are a portfolio of funds, depends on the investment performance of the underlying funds in which they invest. The funds in the portfolio are subject to tracking error risk, or the risk that the fund’s performance may vary substantially from the performance of the index it tracks as a result of cash flows, expenses, imperfect correlation between the fund and the index and other factors. The Strategies’ underlying funds invest in: foreign securities, which subject them to risk of loss not typically associated with domestic markets, such as currency fluctuations and political uncertainty; and fixed income securities, which subject them to credit risk – the possibility that the issuer of a security will be unable to make interest payments and/or repay the principal on its debt – and interest rate risk – changes in the value of a fixed-income security resulting from changes in interest rates. The underlying funds may also invest in commodities markets, which subject the Strategies to greater volatility than investments in traditional securities, such as stocks and bonds. The value of a commodity investment will rise or fall in response to changes in the underlying commodity or related benchmark or investment, changes in interest rates or factors affecting a particular industry or commodity, such as natural disasters, weather and U.S. and international economic, political and regulatory developments.

Underlying funds may also utilize leverage, including inverse leverage. Leveraged funds seek to deliver multiples of the performance of the index or benchmark they track. Inverse funds seek to deliver multiples of opposite of the performance of the index or benchmark they track. The use of leverage can amplify the effects of market volatility on the underlying fund’s share price. Leveraged funds are generally managed with a goal to seek a return tied or correlated to a specific index or other benchmark (target) as measured only with respect to a single day (i.e., from one NAV calculation to the next). Due to the compounding of daily returns, the returns of such leveraged funds over periods other than one day will likely differ in amount and possibly direction from the target return for the same period. These effects may be more pronounced over longer holding periods, in funds with larger or inverse multiples and in funds with volatile benchmarks.

SIMC does not represent in any manner that the tax consequences described as part of its tax-management techniques and strategies will be achieved or that any of SIMC’s tax-management techniques, or any of its products and/or services, will result in any particular tax consequence. The tax consequences of the tax management techniques, including those intended to harvest tax losses, and other strategies that SIMC may pursue are complex and uncertain and may be challenged by the IRS.

Neither SIMC nor its affiliates provide tax advice. Please note that (i) any discussion of U.S. tax matters contained in this communication cannot be used by you for the purpose of avoiding tax penalties; (ii) this communication was written to support the promotion or marketing of the matters addressed herein; and (iii) you should seek advice based on your particular circumstances from an independent tax advisor. Accordingly, Clients should confer with their personal tax advisors regarding the tax consequences of investing with SIMC and engaging in the tax-management techniques described herein (including the described tax loss harvesting strategies) based on their particular circumstances. Clients and their personal tax advisors are responsible for how the transactions conducted in an account are reported to the IRS or any other taxing authority on the Client’s personal tax returns. SIMC assumes no responsibility for the tax consequences to any Client of any transaction.

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