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First Ascent Launches First Flat-Fee, Multi-Factor, Open Architecture Portfolios

Press Release

By First Ascent Asset Management | April 9, 2019

Company Announcement

First Ascent's already robust offering of portfolios becomes even stronger with the Factor Select series.

DENVER, APRIL 9, 2019 — First Ascent Asset Management, a flat-fee portfolio strategist serving financial advisors, today announced the launch of its Factor Select portfolios, the first factor- based portfolios to be offered for a low, flat annual fee.

The new portfolios were developed in response to advisor demand according to Scott MacKillop, First Ascent’s founder and CEO. “Shortly after we introduced flat fees to the asset management world in 2017, advisors started asking us to build factor-based portfolios,” said MacKillop. “We researched the area thoroughly and worked with firms like BlackRock and Goldman Sachs to come up with what we think is the best approach. Now multi-factor ETF portfolios are available for a flat $500 per year.”

“Factor portfolios have been around for a while,” said Patrick Krulik, CFA, First Ascent’s Chief Investment Officer. “But we wanted to incorporate the latest research and the best thinking about how to combine factors together in portfolios and make them available at a reasonable price.”

Krulik explained First Ascent’s approach, “We tilt our portfolios toward the value, size, quality, and momentum factors because there is strong historical evidence that they can provide a performance advantage. Also, they’re not highly correlated to each other. This should smooth out returns over time. We give each factor roughly equal weight because we’ve seen no evidence anyone can time factors.”

“Our use of an open architecture approach is very important too,” continued Krulik. “We didn’t want to be stuck with products from a single firm—all firms have strengths and weaknesses. By using ETFs from firms that define and combine factors differently, our portfolios get an added diversification benefit.”

“The Factor Select portfolios continue in our tradition of using an ‘elegantly simple’ approach to portfolio management,” according to MacKillop. “We want clients to keep more of what they earn, so we keep the number of holdings low, minimize trading, and keep an eye on internal expenses.”

“The Factor Select portfolios hold between 5 and 8 positions and their internal expenses range from 0.11% to 0.23%,” says Krulik. “We achieve full global diversification with fewer holdings and by reducing portfolio costs and expenses, we think we gain a significant performance advantage every year.”

The Factor Select portfolios are First Ascent’s fourth series of portfolios. Each one is designed to address a different set of advisor needs and preferences. First Ascent has produced a video highlighting the different series. They are all offered at five risk levels and each one comes in a tax-sensitive version.

All First Ascent portfolios are overseen by a highly experienced Investment Committee that includes five CFA charter holders and a Ph.D. economist. The Committee is comprised of both First Ascent investment professionals and independent, outside members who bring an added level of objectivity and fresh perspectives to its decision-making process.

“Our goal is to provide a better outsourcing option for all fiduciary advisors,” says MacKillop. “We want to show that it’s possible to provide excellent portfolio management at a fair price, while still offering high-touch service to advisors. The TAMP world needed a wake-up call and we are providing it.”