Back to News

First Ascent Prepares New Factor ETF Models


By Ian Wenik | December 10, 2018

Industry Press

The flat-fee asset manager plans to roll the new models out early next year.

Related Resources

Link to Online Article

First Ascent Asset Management, a developer of flat-fee portfolios for RIAs, is rolling out a new line of factor-based ETF model portfolios in 2019.

The new models, which will select ETFs for value, size, momentum and quality, will be available for advisors potentially as early as February 1 but no later than March 1, chief executive Scott MacKillop told Citywire.

The model portfolios will be available for five different risk tolerance levels –ranging from 20% equities to 100% equities—and also have tax-sensitive versions. There will be 10 model portfolios in all.

‘We’d like to see $100 million in those portfolios by the end of the year,’ MacKillop said.

‘Whether we’ll get there or not will depend a lot on the appetite advisors have for factor-based portfolios, but it seems like that’s a reasonable expectation for us.’

First Ascent currently manages around $160 million across its existing lineup of 30 model portfolios. The firm maintains 10 versions apiece of its Global Explorer Series –a mixture of active and passive funds – its Global ETF Series – a market-cap weighted array of passive funds—and a range of DFA mutual fund models.

The firm charges its client base of around 100 RIAs managing $200 million or less $500 per account or $1,000 per household for access to its models. Though the firm hasn’t made any decisions yet on what funds will go into the new factor models, expect it to be quite judicious: some of its models have as few as three funds.

‘One thing that we take great pride in and focus on in our portfolio construction process is what we like to refer to as “elegant simplicity,”’ First Ascent chief investment officer Patrick Krulik said. ‘We’ve seen portfolios built by others in the world that maybe have more moving parts than they need to get the exposure they need… Our portfolios, we tend to keep on the smaller side in terms of number of positions.’

The Denver, Colo.-based firm plans to have the models built and funded with initial investments from MacKillop by the end of December.

MacKillop said: ‘By limiting the number of positions, keeping trading to a minimum, keeping internal expense ratios low, we’ve calculated that relative to some of our competitors, we start the year with about a 1% performance advantage just by keeping those costs low.’

First Ascent’s also said on on Monday that its portfolios are now available on Envestnet’s platform.