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CONTRIBUTORS

The Canvas Team

Unlike ETFs and mutual funds that offer one pre-packaged product for investors to purchase, the portfolio construction methodology behind Custom Indexing is personalized to an individual’s unique circumstances, risk tolerance, goals, and preferences. Custom Indexes are implemented through a separately managed account (SMA), where investors can directly own a mix of individual securities rather than indirectly owning positions through shares of funds and ETFs.

Custom Indexing is a technology, and technology often removes barriers. Packaged funds sit in between investors and the stocks they own. While mutual funds and ETFs were wonderful innovations in their own right, advances in portfolio management technology and broader investment management infrastructure, have enabled investors to access sophisticated strategies consisting of direct share ownership.

For illustrative purposes only.

The benefits of ‘unbundling’ & owning individual securities

The direct share ownership of Custom Indexes allows for more precise execution of high-end financial planning and offers benefits not available to ETFs, particularly in:

  • Tax Loss Harvesting
  • ESG & SRI
  • Reducing Concentrated Stock Risk
  • Allocation Flexibility

In summary

ETFs and mutual funds suffer from a couple core problems: lack of customization and an inability to actively take advantage of underlying losses to combat tax drag.

Enabled by advances in technology, commission-free trading, and more, Custom Indexing now allows investors to build portfolios that are personalized to their specific situations and preferences. In the future, investors will no longer buy into someone else’s investing formula: each investor will buy into their own.

Custom Indexing is the start of that future, and the time is now.

The material contained herein is intended as a general market commentary. Opinions expressed herein are solely those of O’Shaughnessy Asset Management, LLC and may differ from those of your broker or investment firm.

WHAT ARE THE RISKS?

All investments involve risk, including the loss of principal.

CANVAS® is an interactive web-based investment tool developed by O’Shaughnessy Asset Management, L.L.C. (“OSAM”) that permits an investment professional to select a desired investment strategy for the professional’s client.

O’Shaughnessy Asset Management, LLC is a Franklin Templeton affiliated company.

WF: 9438115

IMPORTANT LEGAL INFORMATION

This material is intended to be of general interest only and should not be construed as individual investment advice or a recommendation or solicitation to buy, sell or hold any security or to adopt any investment strategy. It does not constitute legal or tax advice. This material may not be reproduced, distributed or published without prior written permission from Franklin Templeton.

The views expressed are those of the investment manager and the comments, opinions and analyses are rendered as at publication date and may change without notice. The underlying assumptions and these views are subject to change based on market and other conditions and may differ from other portfolio managers or of the firm as a whole. The information provided in this material is not intended as a complete analysis of every material fact regarding any country, region or market. There is no assurance that any prediction, projection or forecast on the economy, stock market, bond market or the economic trends of the markets will be realized. The value of investments and the income from them can go down as well as up and you may not get back the full amount that you invested. Past performance is not necessarily indicative nor a guarantee of future performance. All investments involve risks, including possible loss of principal.

Any research and analysis contained in this material has been procured by Franklin Templeton for its own purposes and may be acted upon in that connection and, as such, is provided to you incidentally. Data from third party sources may have been used in the preparation of this material and Franklin Templeton ("FT") has not independently verified, validated or audited such data.  Although information has been obtained from sources that Franklin Templeton believes to be reliable, no guarantee can be given as to its accuracy and such information may be incomplete or condensed and may be subject to change at any time without notice. The mention of any individual securities should neither constitute nor be construed as a recommendation to purchase, hold or sell any securities, and the information provided regarding such individual securities (if any) is not a sufficient basis upon which to make an investment decision. FT accepts no liability whatsoever for any loss arising from use of this information and reliance upon the comments, opinions and analyses in the material is at the sole discretion of the user.

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