SEI Expands Direct Index Equity SMA Options

Rhea-AI Summary

SEI (NASDAQ:SEIC) has announced an expansion of its direct index separately managed account (SMA) strategies and enhancements to unified managed account (UMA) solutions. The company introduced new Systematic Core Strategies including S&P 500® Core, U.S. SMID Cap Core, and U.S. Small Cap Core, alongside Parametric Portfolio Associates' Custom Core solutions.

The expansion targets mass-affluent, high-net-worth, and ultra-high-net-worth investors, focusing on three key trends: increasing demand for tax-efficient solutions, combination of public beta and private alpha in UMA strategies, and scaled integration of sophisticated investment solutions. The strategies feature tax optimization capabilities, including opportunistic tax-loss harvesting during market volatility and gain deferral for tax efficiency. SEI provides personalized 'Estimated Taxes Saved' reports to advisors with client-specific tax management information.

Positive

• Expansion of product lineup with new direct index SMA strategies
• Enhanced tax optimization capabilities with personalized reporting
• Strategic targeting of high-value client segments

Negative

• None.

Insights

Investment Management Specialist

SEI's expansion of direct index separately managed account (SMA) options represents a strategic evolution of their product suite rather than a revolutionary development. The addition of new Systematic Core Strategies and Parametric Custom Core offerings positions SEI to better compete in the growing direct indexing space that's rapidly gaining traction among wealth management firms.

Direct indexing provides several advantages over traditional ETFs for high-net-worth clients, particularly tax-loss harvesting opportunities. By holding individual securities rather than fund shares, investors can selectively realize losses while maintaining market exposure—potentially adding 1-2% in annual after-tax returns. SEI's emphasis on tax optimization through their "Estimated Taxes Saved" reporting demonstrates they understand this critical value proposition.

The partnership with Parametric is particularly noteworthy as they're widely recognized as pioneers in the custom indexing space. By incorporating Parametric's solutions alongside their proprietary offerings, SEI creates a more comprehensive platform without building everything internally, accelerating their time-to-market.

For context, direct indexing assets have been growing at approximately 20% annually industry-wide as mass affluent and high-net-worth investors increasingly seek personalization and tax efficiency. This move helps SEI remain competitive with other major players like Fidelity, Schwab, and Vanguard who have all made significant investments in direct indexing capabilities through acquisitions or internal development.

While no financial projections are provided, this expansion reinforces SEI's dual positioning as both an asset manager and technology provider, potentially creating incremental revenue streams from management fees while enhancing their technology platform's value proposition to advisors.

New SEI-Managed and Third-Party Investment Options Elevate Experience and Tax Optimization for Advisors and Investors

OAKS, Pa., March 31, 2025 /PRNewswire/ -- SEI^® (NASDAQ:SEIC) today announced the continued expansion of its direct index separately managed account (SMA) strategies, as well as enhancements to its unified managed account (UMA) solutions, to integrate these strategies into model portfolios constructed to better serve financial advisors and their clients with sophisticated, scalable, and tax-efficient investment solutions.

Designed to serve mass-affluent, high-net-worth, and ultra-high-net-worth investors, the new strategies, which are crafted to hold underlying securities that mirror the attributes of a selected index, include:

• SEI Investment Management Corporation: The Systematic S&P 500^® Core, Systematic U.S. SMID Cap Core, and Systematic U.S. Small Cap Core strategies join the existing robust lineup of direct index equity and fixed income solutions.
• Parametric Portfolio Associates: The Custom Core U.S. Large Cap – S&P 500^®, Custom Core U.S. Mid and Small Cap 1000, and Custom Core U.S. Small Cap strategies join an existing broad set of Parametric's Custom Core^® Equity solutions.

Erich Holland, Head of Client Experience for SEI's Advisor business, said:

"The expansion of our direct index SMAs underscores three major trends in the advisor segment today: the increasing demand for solutions to optimize tax-efficiency, the combination of public beta and private alpha into UMA investment strategies, and the expansion of model adoption to integrate these sophisticated investment solutions at scale. And with technology at the core of delivery, everything we're doing is through the lens of enhancing the client experience."

To help bolster tax optimization, SEI's Systematic Core Strategies and other tax-managed models and SMAs seek to opportunistically harvest tax losses during periods of market volatility and defer gains for tax efficiency. SEI provides a personalized "Estimated Taxes Saved" report to advisors that includes client-specific information about estimated year-to-date taxes saved (or incurred) by performing active tax management.

Jim Smigiel, SEI's Chief Investment Officer, said:

"Our goal remains on designing and offering best-in-class solutions that help anticipate and solve for specific client needs. By broadening our direct index equity SMAs with additional SEI Systematic Core strategies and Parametric Custom Core strategies, we continue to offer flexible, customizable, and tax-optimized solutions that support advisors striving to deliver better client outcomes through institutional-quality investment solutions."

With the growing demand for personalization in wealth management, firms are increasingly integrating direct index solutions and custom SMAs to offer personalized portfolios that can minimize clients' tax bills. SMAs offer individualized strategies run by distinct professional managers, while UMAs provide a comprehensive investment solution that combines multiple strategies within a single account structure. UMAs can also deliver sophisticated tax optimization that seeks to enhance after-tax returns, improve client outcomes, and reinforce an advisor's value proposition.

About SEI^®
SEI (NASDAQ:SEIC) is a leading global provider of financial technology, operations, and asset management services within the financial services industry. SEI tailors its solutions and services to help clients more effectively deploy their capital—whether that's money, time, or talent—so they can better serve their clients and achieve their growth objectives. As of Dec. 31, 2024, SEI manages, advises, or administers approximately $1.6 trillion in assets. For more information, visit seic.com.

Important Information
Information in the U.S. provided by SEI Investments Management Corporation (SIMC), a federally registered investment advisor and wholly owned subsidiary of SEI Investments Company (SEI). For those portfolios of individually managed securities, SIMC makes recommendations as to which manager will manage each asset class. Separately managed accounts are offered through the Managed Account Solutions program.

Neither SEI nor its affiliates provide tax advice. Please note that (i) any discussion of U.S. tax matters contained in this communication cannot be used by you for the purpose of avoiding tax penalties; (ii) this communication was written to support the promotion or marketing of the matters addressed herein; and (iii) you should seek advice based on your particular circumstances from an independent tax advisor.

Investing involves risk, including the potential loss of principal. There is no assurance investment goals will be met. Tracking error risk is the risk that the performance of a portfolio designed to track an index may vary substantially from the performance of the benchmark index it tracks as a result of cash flows, portfolio expenses, imperfect correlation between the portfolio's and benchmark's investments and other factors. This risk is magnified when sampling a benchmark index as the strategy may not track the return of its benchmark index as well as it would have if the strategy purchased all of the securities in its benchmark index.

Beta measures an investment's volatility or sensitivity to market movements, indicating how much an investment's price tends to fluctuate relative to the overall market.

Alpha is the measure of an investment's performance on a risk-adjusted basis, representing the excess return an investment generates compared to a benchmark.

Company Contact:	Media Contact:
Emily Baldwin	Eric Hazard
SEI	Vested
+1 610-676-3262	+1 917-765-8720
ebaldwin@seic.com	eric@fullyvested.com

 

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SOURCE SEI Investments Company

FAQ

What new direct index SMA strategies has SEI (SEIC) launched in March 2025?

SEI launched Systematic S&P 500® Core, Systematic U.S. SMID Cap Core, and Systematic U.S. Small Cap Core strategies, along with Parametric's Custom Core U.S. Large Cap, Mid and Small Cap 1000, and Small Cap strategies.

How does SEI's tax optimization work in their new SMA strategies?

SEI's strategies utilize tax-loss harvesting during market volatility and defer gains for tax efficiency, providing personalized 'Estimated Taxes Saved' reports to track client-specific tax savings.

What investor segments does SEI's new direct index SMA expansion target?

The expansion targets mass-affluent, high-net-worth, and ultra-high-net-worth investors seeking sophisticated, scalable, and tax-efficient investment solutions.

What are the three major trends SEI addresses with their expanded SMA offerings?

The trends are: increasing demand for tax-efficient solutions, combination of public beta and private alpha in UMA strategies, and scaled integration of sophisticated investment solutions.