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UBS Asset Management Enhances Separately Managed Accounts Multi-Asset Portfolios Offering

New York Media Releases Americas Investment Bank News

Lineup includes personalized tax management, active asset allocation for a broader range of clients

New York, April 7, 2017 – UBS Asset Management (Americas) Inc. enhanced its lineup of separately managed account UBS Multi Asset Portfolios (MAPs) available to US and certain offshore investors through its Private Wealth Solutions program. The enhanced lineup, which became available to new clients in February, offers the program's Personalized Tax Management (PTM) overlay feature to a broader range of clients. The simplified MAPs offering streamlines the number of portfolios and makes asset allocations more consistent across MAPs options.

"Even if tax rates fall under the new administration, they still stand to take a meaningful bite out of investors’ returns," said Phil Brides, Co-head of Portfolio Management within Investment Solutions at UBS Asset Management. "Our experience suggests many financial advisors and their clients are missing out on opportunities to reduce the impact of taxes. Historically, investors may have struggled to implement tax management strategies in a risk-aware way due to the lack of analytics or tools to fully assess the impact of their tax management strategies on the risk/reward profile of their portfolios."

"Investors are becoming increasingly aware of the impact taxes can have on their returns, and financial advisors now have more tools available to help their clients reduce the potential impact of taxes. As a result, more financial advisors are bringing proactive tax management strategies to their clients’ attention," said Michael Belasco, Head of Wealth Management Americas Distribution at UBS Asset Management. "We redesigned our separately managed account Multi-Asset Portfolios around the needs of US individual investors, simplifying the lineup and adjusting our asset minimums for the PTM feature. Now tax-aware investing is available to more clients, including for the first time investors in our all-ETF MAPs offerings."

Belasco adds, "Each client’s tax situation is unique. We’ve refined a process and established a successful track record of working with each client and their financial advisor to improve their after tax returns in an ongoing, risk-aware manner. The SMA MAP enhancement reflects our desire to bring those tools to a broader range of clients to help them manage their tax exposures on a daily basis throughout the year."

The new UBS MAPs includes six categories of MAPs with 22 portfolio choices for US investors and two categories of MAPs with seven portfolio options for offshore clients. US investors can choose from tax-optimized or traditional SMA portfolios with either ETFs as the underlying investments or a combination of individual securities and ETFs. UBS MAPs are available exclusively through UBS Financial Services Inc.'s financial advisors.

Risk ranges, tax status, on shore and offshore—Each of the new categories of MAPs generally is available in four versions, and there are options for US taxable and tax-exempt investors as well as offshore investors.

Personalized Tax Management (PTM)—PTM is applied at the individual client account level for each of the new UBS Tax-Optimized Active MAPs and UBS Tax-Optimized Active ETF MAPs. The objective of PTM is to pursue the same pre-tax performance as the underlying model portfolios. By monitoring client portfolios' tax gains and losses on a daily basis throughout the year, UBS Asset Management's MAPs team applies sophisticated risk-aware techniques, including active tax-loss harvesting and the deferral of short-term capital gains, in an effort to improve each client's after-tax returns while considering their specific tax information.

Strategic Allocation—The strategic asset allocation models that underpin all of the new MAPs have been designed to address the needs of US private clients. They generally include a 65/35 split between US and non-US equity exposure, and fixed income investments generally will be in US securities. MAPs will invest in global ex-US government bonds and nontraditional asset classes opportunistically.

Tactical Allocation—The tactical asset allocation policy of the benchmark-relative MAPs (other than UBS Strategic MAPs) limits the maximum overweights or underweights to 15% at the equity and fixed income asset class level but will rarely exceed 10% under normal conditions. The MAPs' maximum cash weight is 30%, but will rarely exceed 20% under normal market conditions. Tactical allocation is not available on the UBS Strategic MAPs.

Opportunistic (objective-oriented) portfolios—While the new MAPs product suite consists mainly of benchmark-oriented portfolios, UBS Asset Management also has launched two new objective-oriented (opportunistic) portfolios. Those portfolios include UBS Tax-Optimized Active ETF MAP—Opportunistic and UBS Offshore Active ETF MAP—Opportunistic. Both are managed to a target risk range that corresponds with a moderately aggressive MAP risk profile rather than being managed relative to a blended benchmark.

Opportunistic sleeve—All benchmark-oriented MAPs (except the UBS Strategic MAPs) feature an "opportunistic" sleeve, in which the investment team may invest up to 10% of assets in off-benchmark exposures. The opportunistic sleeve will generally be used to further improve the portfolio's risk/reward profile or to tactically take advantage of opportunities. It will not be used to add exposure to asset classes already in the benchmark. Those off-benchmark exposures may include Nontraditional Fixed Income, Real Estate, Commodities, Hedge Fund Replication Strategies, High Yield Municipal Fixed Income, Asset-Backed Securities and Mortgage-Backed Securities, Local Currency-Denominated Emerging Markets Debt, Convertible or Preferred Corporate Securities, and Global (Ex-US) Government Bonds. Exposure to these asset classes may be delivered via pooled investment vehicles or Exchange Traded Funds.

Strategic MAPs—UBS Asset Management continues to offer four portfolios of strategic MAPs with individual securities for clients who do not want tactical allocation as part of the management of their portfolios. UBS Strategic MAPs have preset (target) asset allocations and provide automatic rebalancing, which typically occurs when a portfolio's style weighting varies from its target allocation by approximately 7% to 10%.

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About UBS Asset Management

Asset Management is a large-scale asset manager with a presence in 22 countries. It offers investment capabilities and investment styles across all major traditional and alternative asset classes to institutions, wholesale intermediaries and wealth management clients around the world. It is a leading fund house in Europe, the largest mutual fund manager in Switzerland, the third-largest international asset manager in Asia, the second largest fund of hedge funds manager and one of the largest real estate investment managers in the world.

About UBS

UBS provides financial advice and solutions to wealthy, institutional and corporate clients worldwide, as well as private clients in Switzerland. The operational structure of the Group is comprised of our Corporate Center and five business divisions: Wealth Management, Wealth Management Americas, Personal & Corporate Banking, Asset Management and the Investment Bank. UBS's strategy builds on the strengths of all of its businesses and focuses its efforts on areas in which it excels, while seeking to capitalize on the compelling growth prospects in the businesses and regions in which it operates, in order to generate attractive and sustainable returns for its shareholders. All of its businesses are capital-efficient and benefit from a strong competitive position in their targeted markets.
UBS is present in all major financial centers worldwide. It has offices in 54 countries, with about 34% of its employees working in the Americas, 35% in Switzerland, 18% in the rest of Europe, the Middle East and Africa and 13% in Asia Pacific. UBS Group AG employs approximately 60,000 people around the world. Its shares are listed on the SIX Swiss Exchange and the New York Stock Exchange (NYSE).

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