Firms Launch Portfolio Unitization Service

The service allows investment advisers, model managers and recordkeepers to provide customized model portfolios, including mixed model portfolios, to retirement plan sponsors and participants.

The new service is powered by Folio Instituational’s patented trading and custody technology and unitZXchange’s unit accounting capability.

The companies’ unitization solution is expected to drive adoption of exchange-traded funds and mixed model portfolios by retirement plans, since the product allows any model portfolio—consisting of any mix of securities (funds, ETFs and/or individual stocks)—to be unitized. Recordkeepers, who have typically required or preferred unitized investments and Net Asset Value pricing, are no longer restricted to the trading of mutual funds.

Through the unitization service, unitZXchange creates a single unit value for model portfolios which are custodied on the Folio Institutional platform. As a result, retirement plan participants are easily provided information through existing systems that provide unit value reporting.

“Because the model portfolios can now be reported with a unit value, it’s very easy for the recordkeeper to trade them through their normal daily valuation process,” said Alan Smith, vice president of retirement services, Folio Institutional. “And of course the actual model is still very much customizable.  It can be easily rebalanced and updated—which can include the use of fractional shares of ETFs or individual stocks—by the advisor or investment manager through Folio’s model management system.”

For more information, contact  Alan Smith at 803-631-5078 or smitha@FolioInstitutional.com; or Larry Harris, at 703-869-2551 or lharris@unitZXchange.com.