Ethic, the tech-driven asset management platform that powers personalization for advisors, today announced it will allow financial intermediaries to build custom, tax-managed portfolios based on Morningstar Indexes, part of Morningstar, Inc. Under this new agreement, Morningstar will license a number of its U.S. equity market indexes to serve as the base exposure for Ethic portfolios.
Ethic is a leading independent provider of sustainable direct indexing strategies for financial intermediaries, with approximately $1.6 billion in assets*. Using separately managed accounts (SMAs), Ethic is able to offer a level of portfolio customization once reserved for major institutional investors. Its scalable technology platform enables advisors to create passive equity portfolios that reflect clients’ unique sustainability, financial, charitable giving and tax management preferences—all while seeking to minimize tracking error against the underlying benchmark.
This new pairing will combine Morningstar’s differentiated indexing capabilities, based on leading-edge data and the research insights of Morningstar, with Ethic’s user-friendly technology experience, suite of analytical tools, and array of sustainability insights. Advisors using Ethic’s solution will be able to implement the following Morningstar Indexes as performance benchmarks, at no additional cost:
• Morningstar® Wide Moat Focus Index
• Morningstar® US Dividend Valuation
• Morningstar® US Large Cap IndexSM
• Morningstar® US Large Cap Broad Growth IndexSM
• Morningstar® US Large Cap Broad Value IndexSM
• Morningstar® US Small-Mid Cap Extended IndexSM
• Morningstar® US Small-Mid Cap Broad Growth Extended IndexSM
• Morningstar® US Small-Mid Broad Value Extended IndexSM
“Ethic believes that personalization is the future of asset management,” said Alex Laipple, head of business development at Ethic. “Our collaboration with Morningstar Indexes aims to provide advisors and their clients with even greater opportunities for customization, allowing them to build portfolios and make direct benchmark comparisons based on their unique needs.”
“Morningstar is committed to empowering investor success,” added Peter Dietrich, global head of business development for Morningstar Indexes. “As advisors and their clients increasingly seek out index-based investment tools tailored to individual goals, we’re pleased to collaborate with innovative firms such as Ethic that are answering that call and enabling personalization at scale. Working together, we hope to support wealth advisors and their clients in more informed investment decision-making.”
Ethic plans to make additional Morningstar indexes available to Ethic advisors in the near future. For more information about Ethic, please visit www.ethic.com.
About Morningstar Indexes
Morningstar Indexes, part of Morningstar, Inc. was built to keep up with the evolving needs of investors – and to be a leading-edge advocate for them. Our rich heritage as a transparent, investor-focused leader in data and research uniquely equips us to support individuals, institutions, wealth managers and advisors in navigating investment opportunities across all major asset classes, styles and strategies. From assessing risk and return with traditional benchmarks to helping investors effectively incorporate ESG objectives into their investment process, our range of index solutions spans an investment landscape as diverse as investors themselves. We help investors answer today’s increasingly complex questions so that they can more easily reach tomorrow’s goals.
Please visit indexes.morningstar.com for more information.
Ethic is a leading independent provider of sustainable direct indexing strategies for financial intermediaries. The company enables advisors to personalize a given index to correspond with a client’s investment, values, and tax management preferences, while seeking to minimize tracking error to the underlying benchmark. The Ethic offering is available to advisors custodying with Fidelity, Charles Schwab / TD Ameritrade, U.S. Bank, or Pershing. The company is backed by investors including Oak HC/FT, Nyca Partners, Fidelity Investments, and ThirdStream Partners. Ethic is an SEC Registered Investment Adviser based in New York City.
*as of November 30, 2021