Host: What are managed portfolios? Why would you recommend them to clients? And what are their business-building advantages for financial advisors? Coming up, we find out.

Host: From Thrivent Asset Management, welcome to Advisor’s Market360, a podcast for you, the driven financial advisor.

Managed portfolios are not only an excellent financial vehicle for investors; they are great for financial advisors who are trying to manage and build their business. Before we go much further, a quick definition of managed portfolios may be helpful: Managed portfolios—also known as managed accounts or model portfolios—are an actively managed solution of models comprised of mutual funds and exchange-traded funds, or ETFs, combined to align with investors’ risk tolerances and financial goals. Managed portfolios are carefully curated to ensure a diversified and balanced investment approach.

To understand more, we have two experts to help us with a deep dive on the subject, along with a look into Thrivent Asset Management’s own managed portfolio programs. They are Jeff Branstad, Model Portfolio and Managed Account Strategist and Charlie Hofstrom, Investment Product Manager.

Let's get into it…

One key consideration when constructing a managed portfolio is selecting the underlying managers that will be part of the portfolio. Thrivent has a sophisticated manager selection process to identify style-pure managers with consistent historic risk-adjusted performance. Branstad explains further:

Branstad: So, when we're looking at finding a new manager to fill an open space within one of our model portfolios, we look for three general characteristics in managers. We're looking for strategies that have shown that they have consistent long-term outperformance, versus their peers. We're looking for ones that are style-pure within the asset class that they're managing in. And we're looking for ones that are complementary to the rest of our existing product lineup. As a part of this, there's several steps that we go through where we are using a proprietary scoring system to assign and rank funds in a specific asset class that we're looking for. Then we narrow down the managers with the stronger strategies and remove those that we consider to be poor fits. Then we'll compare the finalists across a variety of qualitative and quantitative characteristics—expenses, performance history, risk analysis. Ultimately, we choose the manager that we feel best aligns with our investment approach. The goal is to find a style-pure manager, like I said, that has strong potential for long-term success.

Host: Manager selection is a time-consuming process, and it takes dedication and expertise to monitor managers once selected. For financial advisors, outsourcing to a team of experts like those at Thrivent Asset Management can be beneficial. Hofstrom explains why…

Hofstrom: Outsourcing manager due diligence allows advisors to focus more on building their client relationships and allows for more time for business development as well. It takes a very long time to find successful managers across different asset classes and then stay on top of doing the ongoing due diligence in order to track those managers, how they're performing, watching for portfolio manager changes, monitoring their performance, monitoring their prices, etc. There's a lot of time spent on researching managers that financial advisors could be using elsewhere, again, to grow their business and grow their relationships with their clients.

Host: Within Thrivent Managed Portfolios, there are four different programs that we’ll dive into soon. But first, we asked Branstad to give a high-level overview of these products:

Branstad: Each of them takes a slightly different approach, but they all have the same general core characteristics. They're designed for long-term investors. They're a mix of nonproprietary and proprietary funds and ETFs. And they're broadly diversified across multiple dimensions: investment style, asset class, asset managers, etc. And they also all follow tactical allocations. That's the flexibility to adjust portfolio allocations when we see opportunities in the market.

Host: We were curious to hear more from Branstad about tactical allocations:

Branstad: So, a tactical allocation is when you're looking at the opportunities in the marketplace and adjusting your underlying positions to take advantage of that. So, you may decide that you want to overweight domestic equity stocks, and therefore you're going to buy more U.S. equity, and then on the flip side, sell international.

Host: Branstad explained why tactical allocation may be beneficial to investors:

Branstad: Investing tactically in model portfolios like these gives the asset managers the opportunity to change the positions depending on what's going on in the market. So, if they see opportunities in a certain asset class of the market, we can lean into that and vice versa. If there are certain risks in certain areas of the market, we can reduce our exposure to those areas, all with the goal of improved relative performance for the end clients.

Host: Next, we wanted to hear more about the programs offered within Thrivent Managed Portfolios. The first program launched is known as Thrivent SELECT Managed Portfolios^™. Branstad shares more:

Branstad: We've been running it since 2007, which is actually a pretty long time in the scope of the managed account world. We offer five risk-based accumulation models from aggressive to conservative. They're based on how much equity they have as our target percentage. So Aggressive is at 95% equity target and Conservative is at 20%. As we mentioned, we manage these tactically, so they'll be often a couple percent above or below those targets. They are full open architecture to pick underlying managers. And what that means is that we have a mix of both Thrivent products, mutual funds and ETFs, and other third party asset managers’ products. That allows us to have an extra layer of diversification, because not only are we diversified across asset classes, we are also now diversified across asset managers. And we extend that diversification by holding a mix of active and passive positions inside the portfolios. And all of that leads to a broader diversification. So, if one certain type of investment style or asset manager's views are out of favor, it is not going to blow up the entire portfolio.

Host: For investors who are looking for income, Branstad described how their needs may be met with this next program known as Thrivent Income-Focused Managed Portfolios^™…

Branstad: This is not an accumulation-based suite of models, but rather it is two income-oriented models that are designed more for distribution. So they prioritize generating higher levels of income than the more traditional accumulation-based models do for clients that are looking for that as a solution to their distribution needs.

Host: Another program is Thrivent SELECT Tax Sensitive^™. These models are similar to those in the SELECT program, except they are more focused on prioritizing tax efficiency. Branstad had this to add about SELECT Tax Sensitive:

Branstad: It's still got the five risk-based accumulation models from aggressive to conservative. But what we do differently in SELECT Tax Sensitive is on the fixed income side, for example, we own primarily muni bond funds, to generate income that is largely free from federal income tax. On top of that, we also make fewer transactions in those models. So essentially, we accept a greater dispersion from our targets than we would in, say, SELECT, so that there's less activity, less trading activity, and therefore, less chance to realize gains. Another thing that we do to improve the tax efficiency is that we minimize the amount of funds that we hold that have the potential for paying capital gains. Very, very few ETFs ever pay cap gains. And so we use a lot of ETFs in these models. And we also focus on some quantitative strategies that have historically never paid cap gains as well.

Host: We asked Branstad about other tax strategies used in the SELECT Tax Sensitive models:

Branstad: We do seek opportunities for tax loss harvesting. If there is a position that we own that has been falling in value and we have an opportunity to sell it into something else, we can generate a loss to help offset some of the gains that could be either realized from other transactions in the portfolios or even for that you can offset against other gains in other client portfolios.

Host: Thrivent Asset Management also offers Thrivent Faith-Based Managed Portfolios^™. We asked Branstad to give us more details:

Branstad: Another suite of model portfolios that we have are faith-based managed portfolios. We launched these in the summer of 2020. They are also risk-based accumulation models. There are three of them here, though, instead of five. We focus on the three in the middle, moderately aggressive, moderate, and moderately conservative. The difference with these faith-based models is that they utilize funds from asset managers that have self-described Christian value screens. Those screens are removing companies that are associated with alcohol, tobacco, abortion, gambling and adult entertainment. We use a couple of other Thrivent funds in there that, while they're not screened, they're in asset classes that these types of companies that we are trying to screen out simply don't exist, such as government bonds.

Host: Another thing that is interesting to note is how long Thrivent Asset Management has been managing these portfolios. In fact, whereas the average inception date of all model portfolios tracked by Morningstar is approximately nine and a half years ago, Thrivent SELECT Managed Portfolios program has an 18 year history — nearly twice as long as our peer average.

Financial advisors may be able to benefit in many other ways when they use managed portfolios. Hofstrom explained how:

Hofstrom: Some of the key business benefits include time back for planning and prospecting, increased capacity and scalability, higher practice value and growth, more consistent client experiences, along with deeper client relationships. Advisors who outsource or use models materially reduce time spent on security selection, trading and rebalancing, freeing more time for planning and business development. A single set of centrally managed portfolios can be applied across many households, so adding clients does not linearly increase investment management workload. Models apply a documented process across clients with similar objectives, improving consistency and allocation risk profile and rebalancing.

Host: In addition, financial advisors like managed portfolios because they enhance the client experience, which helps with client retention. Again, here’s Hofstrom:

Hofstrom: Models have explicit objectives such as moderate growth with income, making it simpler for clients to understand the strategy and stay invested through volatility. Also, investors who are invested in model portfolios report higher confidence that their advisor understands their goals and can deliver on them compared with non-model users.

Host: Branstad had this add about why financial advisors should consider managed portfolios—especially those offered by Thrivent Asset Management:

Branstad: There's a whole team of investment professionals, portfolio managers, research analysts that spend their entire days researching either managers and how they fit into the model portfolios, the asset class research to help decide on strategic and tactical allocation positioning. There is a ton of work that goes in that the Thrivent Asset Management Portfolio Management team for the models does that advisors simply don't have the time to be able to do all that work while still growing their practice and servicing their existing clients.

Before we go, Branstad wanted to highlight Thrivent Asset Management’s long history with managed portfolios:

Branstad: Thrivent Asset Management has a long and successful history of managing asset allocation strategies. We have a highly experienced team of investment professionals working on these model portfolios, including some of Thrivent's most senior leaders. We trade the portfolios tactically when we see opportunities in the market, not on a set schedule, and our investment process is sophisticated and ever evolving. All of this is in service to making it easier for advisors to support their clients.

Host: We hope you enjoyed this look at managed portfolios. We would like to thank Jeff Branstad and Charlie Hofstrom for their insights. What did you think of this episode? Email us at podcast@thriventfunds.com with your feedback or questions for our experts. Want more episodes of Advisors Market360 and other market and investing insights? Visit us at thriventfunds.com, where you can learn how we can partner with you, the driven financial advisor. Bye for now.

All information and representations herein are as of 2/6/2026, unless otherwise noted.

Past performance is not necessarily indicative of future results.

The views expressed are as of the date given, may change as market or other conditions change, and may differ from views expressed by other Thrivent Asset Management, LLC associates. Actual investment decisions made by Thrivent Asset Management, LLC will not necessarily reflect the views expressed. This information should not be considered investment advice or a recommendation of any particular security, strategy or product. Investment decisions should always be made based on an investor's specific financial needs, objectives, goals, time horizon, and risk tolerance.

Investing involves risk, including the possible loss of principal. The prospectus and summary prospectus for the securities within the model portfolios contain more complete information on the investment objectives, risks, charges, expenses and other information of the fund, which investors should read and carefully consider before investing. To obtain prospectuses and summary prospectuses, contact your Regional Investment Consultant or call 800-521-5308.

Thrivent Asset Management, LLC’s role is providing sponsors of managed accounts with non-discretionary investment advice in the form of model portfolios. The implementation of or reliance on a model portfolio is at the discretion of the managed account sponsor. Thrivent Asset Management, LLC is not providing personalized investment advice or investment recommendations and will not make any representations about the suitability of a model portfolio for any investor. Thrivent Asset Management, LLC does not have investment discretion over, or place trade orders for any portfolio derived from this information.

Thrivent Managed Portfolios will include Thrivent Mutual Funds. Asset management services for the Thrivent Mutual Funds are provided by Thrivent Asset Management, LLC, an SEC-registered investment adviser, and receives fees for its services as disclosed in the applicable Funds’ prospectuses and Statement of Additional Information. As the investment adviser for Thrivent Mutual Funds, Thrivent Asset Management, LLC has greater knowledge of these funds and has a tendency to prefer Thrivent Mutual Funds over non-affiliated funds, which may be a conflict of interest. Thrivent Mutual Funds included in the Faith-Based models do not incorporate an exclusionary screening process, but do not own securities that may conflict with certain values as described above. Thrivent and its subsidiaries may earn distribution and other fees, including 12b-1 fees, in connection with Thrivent Mutual Funds. At this time, Thrivent Asset Management does not receive any direct fees for the provision of model portfolios, although it could receive such fees if negotiated with the program sponsor. For more information about potential conflicts of interest, read the Thrivent Asset Management, LLC Form ADV – Part 2 Brochure. Thrivent Distributors, LLC, a registered broker-dealer and member FINRA, is the distributor for Thrivent Mutual Funds. Thrivent Distributors, LLC, and Thrivent Asset Management, LLC are subsidiaries of Thrivent, the marketing name for Thrivent Financial for Lutherans.