Separately Managed Accounts

Catherine LeGraw and B.J. Brannan of GMO's Asset Allocation team discussed the role of liquid alternative strategies in today's investment landscape. 

Advisors outsourcing at least 20% of assets reported saving 9.1 hours per week, or approximately 473 hours annually. WisdomTree research found 90% of investors welcomed third-party model portfolios, suggesting clients may be more comfortable with outside expertise than advisors expect.

The new investment case for global power, security and affordability. The phrase “energy transition” has served as a useful political and cultural shorthand, but it has become a misleading framework for capital allocation. Franklin Templeton Institute explodes new opportunities for investors—and where shifts in thinking may be needed.

Advancements in technology, combined with significant stock market gains in recent years, have created a new set of opportunities—and challenges—for investors. For example, investors holding a concentrated position in a highly appreciated stock may face a difficult trade-off between the risk of a market downturn and the potentially significant tax cost of diversifying the position.

Demand for fixed income ETFs hit a historic high-water mark in September. Investors and advisors turned to fixed income ETFs at a record-breaking pace, driving 2026 net inflows of $446 billion past all-time levels with months to spare. The massive tide of capital arrives at a critical juncture.

In Part III, the focus will center on practical applications of this discipline. In particular, how advisors can integrate the methodology into modern asset allocation, and why it offers an evolutionary leap for passive investing that’s available through exchange-traded funds (ETFs).

One or a few high-performing stocks can provide a big boost to portfolio values. But they’re hard to come by and often struggle to maintain their momentum over time. Because these stocks increase portfolio concentration, investors must balance the risk of overexposure against the tax cost of diversifying. A thoughtful, tax-aware plan may help bring portfolios back in line.

Benchmark-Free has been a flagship strategy for half of GMO's history. As we approach our 50th anniversary in 2027, Ben Inker reflects on our first 25 years of Benchmark-Free investing.

When markets become volatile, many investors gravitate toward assets they perceive as “safe.” Cash, certificates of deposit (CDs), money market funds, U.S. Treasury securities, and high-quality bonds can all play an important role in a diversified portfolio. But “safe” doesn’t necessarily mean “risk-free.”

Cerulli projects a $2 trillion surge in advisor-held alternatives over five years, as interval funds reshape how RIAs access private markets.

Global fixed income and equity ETF strategies posted gains and saw inflows surge in August, even amid ongoing macroeconomic turbulence and elevated long-term borrowing costs. International equities maintained their year-to-date lead over U.S. stocks throughout the month, led by notable strength in emerging markets.

Stocks have enjoyed a powerful run off the spring lows and have largely shrugged off concerns around growth, inflation, higher interest rates, the effects of artificial intelligence (AI), geopolitics, and policy uncertainty. As the calendar turns to September, however, they are entering what has historically been, from a seasonality perspective, the most challenging month of the year for equities.

Geopolitical headlines can quickly move markets, but investors do not need to predict every headline to identify potential opportunity. The more useful question is what governments, businesses and consumers are doing in response to a changing strategic environment, and which companies may benefit.

August was a good month in financial markets, with the S&P 500 up around 2.7%. The market leaders came from the commodity complex, with gold and bitcoin (not sure how this should be classified) being the two top performers.

Record fixed income ETF inflows in August pushed year-to-date ETF totals past $1.4 trillion, with short-term bonds leading the surge.

A credit-allocation problem is complicating the Fed’s dual mandate, with current policy restrictive for many consumers and weaker borrowers, but less so for large corporates, higher-quality issuers, and borrowers with access to private credit.

European equities have long been written off as the ultimate value trap — a sleepy, slow-growth market living in the shadow of Wall Street’s tech-fueled mega-rally. But a massive shift in market dynamics is unfolding across the Atlantic.

When it comes to equities exposure, investors typically gravitate toward a passive, market-cap-weighted index as the default strategy. These strategies are often billed as an efficient, low-cost method to capture broad market returns. As such, cap-weighted funds that track the S&P 500 or MSCI World have taken in trillions of dollars in global capital. However, within these market-cap-weighted indexes, a structural flaw exists.

Today, the backdrop for real assets has reset. Growth is returning, but in different parts of the market than many investors remember. While in the post-pandemic period performance was defined by scale, now it is the result of adaptability and having access to a broad array of organization sizes and business plans.

GMO’s liquid alternatives are hedge fund strategies (e.g., equity long-short, global macro, event-driven) managed with an emphasis on risk control and liquidity. The GMO Alternative Allocation Strategy (“ALTA”) is a liquid alternative solution combining several underlying strategies; ALTA is available in a mutual fund with daily liquidity.

High-yield municipal bonds are one of the best performing asset classes this year but that doesn't mean we think all investors should consider adding them to their portfolio.

Hedged equity as a liquid alternative uses an options-based equity strategy — specifically Swan Global Investments’ Defined Risk Strategy (DRS), in continuous operation since 1997 — as a permanent alternatives allocation that stays invested in the equity market while actively managing downside risk through LEAPS put options

For most high-net-worth investors, the bond sleeve of a portfolio isn't there to generate eye-popping returns or provide cocktail party fodder. Its job is much more mainstream: support a targeted lifestyle, cover tax bills, dampen equity market volatility, and provide "dry powder" when the world turns sideways.

Demand continues to outpace record supply. Municipal bonds remain an attractive income opportunity in a market where the Federal Reserve (Fed) is likely to remain on hold and carry is driving returns. Despite record issuance of roughly $50 billion per month, demand has remained strong. 

The AI trade has faced renewed volatility as investors question AI spending and current valuations. Semiconductor stocks and related areas — including memory, networking, photonics, and chip equipment—have all been caught in the pullback.

There is no one-size-fits-all individual investment strategy. We all have different needs. Once I decided I needed a portfolio that would work for today, I became convinced that a dividend growth portfolio should be the core of my long-term investment strategy. Not an addition, but the core.

Investors worried about highly appreciated stock positions and the related capital gains exposure may avoid transitioning concentrated portfolios to more diversified tax-managed solutions. In our view, a multiphase transition may enable them to strike a balance between how fast concentration risk is diversified and the size of their annual tax bill.

July 2026 was a flattish month for markets. The S&P 500 index was down slightly. Value did well, while momentum did poorly. Smallcaps, midcaps, and emerging markets, all of which have been the year’s best performers, had a bad month. Commodities, driven largely by oil prices, led the pack, as the fragile ceasefire in Iran failed to hold.

New clients frequently arrive with portfolios that have been built over many years, often across multiple market cycles and advisory relationships. While these portfolios may have generated strong returns, they can also contain concentrated positions, legacy holdings or allocations that no longer align with the client's objectives.

Lately, it seems like you can’t open a financial publication without stumbling across another article declaring the 60/40 portfolio dead. The pitch is everywhere: bonds are broken, the old rules no longer apply, and investors should modernize by swapping the bonds in their portfolio for Bitcoin, gold, or whatever alternative the asset management industry is currently selling.

A wave of new active ETFs is reshaping the fund landscape, and advisors now need extra care when screening funds for their models.

The first half of 2026 was shaped by market-moving headlines. The conflict in the Middle East was the most significant story, triggering a short-term market sell-off.

Halfway through the year, the U.S. equity market performance is broadening. That said, market concentration remains incredibly high, while equity and bond correlations sit in positive territory — conditions that scream a call for diversification. Investors are heeding that call, many with alternatives ETFs.

The good news is real. The easy trade is not. Growth has held up, artificial intelligence investment is showing up in earnings and capital spending, and fixed income is offering yields that create serious cushion for portfolios.

Private debt is increasingly valued for its potential to help insurers operationally and strategically: support liability matching, improve portfolio design, diversify underlying exposures and, when underwritten well, add resilient excess return.

The current level of stock market valuations remains – easily – the most speculative extreme in U.S. financial history, beyond both the 1929 and 2000 extremes. Our baseline estimate is that the S&P 500 has a material risk of losing something on the order of 75% over the completion of this cycle.

The first half of 2026 reinforced an important lesson for fixed income investors: Tax-loss harvesting opportunities don’t always arrive at year-end, often appearing during short periods of market dislocation when interest rates rise, new-issue supply increases or investor sentiment shifts.

Unpack the latest ICI flow data as long-term mutual funds bleed billions directly into low-cost, model-ready ETFs.

The capital markets have become an increasingly complex space for investors, complexities that are heightened by the sheer number of ways one can invest.

Model portfolios are seeing billions in inflows, and part of that success may be from how these strategies implement ETFs and private assets.

The most interesting shift in market price action in June was the strong outperformance of value stocks compared to the broad market and tech

Markets may have ended the first quarter with a thud, but stocks put another record run in the books to close out the first half of 2026. The U.S. ETF market had already shattered records, crossing the $15 trillion threshold and cruising past $1 trillion in net inflows right before summer officially began.

Startup equity decisions often happen before a founder has a full advisory team in place. Formation documents get signed, vesting schedules are approved, and the tax consequences may not feel urgent because the company is still young.

Model portfolios have helped many advisors solve for scale. The next challenge is more nuanced: how do advisors keep that scale while delivering more personalization, tax awareness and differentiated value to clients?

As the market continues to broaden in 2026, a balanced approach matters more than ever.

VettaFi currently has index products tied to ETFs issued by American Century, Victory Capital, and ALPS ETFs, but the addition of RAFI products issued by Invesco and PIMCO that are fundamentally weighted is really exciting, according to Rosenbluth.

The international ETF landscape has become quite popular with investors over the last year. Investors flocked to ex-U.S. equity opportunities over the last 12 months, driven by high domestic valuations and persistent concentration risk. By contrast, emerging and international markets have both offered lower costs and healthy diversification.

The most consequential decisions a founder will face, equity gifting before valuations increase, trust structures timed ahead of a sale, QSBS qualification built while eligibility still exists, all must be decided before liquidity. Once the transaction closes, much of what was available earlier is simply gone.

Reserve managers' decisions on EM debt go beyond investment potential—they must also weigh considerations such as governance, resources and liquidity.

For insurers, fixed income remains the foundation of portfolio strategy. But while public markets have long provided unrivaled sourcing capacity and liquidity, the definition of “core” is widening.

A massive advisor retirement wave is reshaping wealth management. Discover how $2.5 trillion in assets may fuel industry transformation.

In this video, Chuck Carnevale responds to a viewer's question about building a retirement income portfolio for a 63-year-old investor. Rather than recommending specific stocks, Chuck focuses on the process he uses to identify high-quality income investments using the principles of value investing and the FAST Graphs platform.

For many registered investment advisors (RIAs), success has traditionally been measured in assets under management (AUM). As the industry evolves and consolidation accelerates, a broader question is emerging: are you building a practice or an enterprise?

Building resilient portfolios in markets delivering mixed messages can be a challenging affair. In our ongoing engagement with the retail and advisor community at VettaFi, we hear first-hand just how investors are tackling that challenge this year.

In light of all this, our own view is that markets remain well positioned to continue to rally over the medium term, though given their stratospheric rise of late, a bit of a pullback might be in order in the short term.

The IPO market may be entering one of its largest cycles in years, but the next wave may be defined less by breadth than by scale. Instead of hundreds of companies listing, a smaller group of AI and strategic infrastructure leaders could reset the market on their own.

Emerging markets offer important exposure to economic growth through rapid industrialization, natural resource endowments, and strong demographic dynamics.

Private markets have become integral to modern portfolios, with many investors searching for higher returns and diversification, including from public markets. But recent fund redemptions have reinforced that illiquidity isn’t theoretical, raising questions about the benefits of giving up liquidity. We see several—but investors must understand the trade-offs.