1.1 Content. Parametric grants to you and Authorized Users (defined below) a limited, nonexclusive, nontransferable, royalty-free, non-assignable, revocable license to access, use, host, execute, copy, and display the Content to display or otherwise use the output produced from the Content, except that to the extent that the Content contains or provides access to account information, including, without limitation, transaction records and performance reports, relating to clients with whom you have a separate pre-existing relationship (“Your Client(s)”) (“Client Information”) or data that is licensed from third party data providers (“Third Party Data”), such Client Information is excluded from Parametric’s grant contained in the previous clause and such Third Party Data remains subject to the agreement granting Parametric rights to use such Third Party Data. The license granted hereunder includes your right to allow your employees and independent contractors (collectively, “Authorized Users”) to use the Contents as set forth herein. No further rights are granted to you with regard to the Content. There shall be no limit to the number of transactions or number of uses of the Content by you.
1.2 Documentation. Any documentation that accompanies the Content, exclusive of Client Information, whether in printed, electronic, or any other form, is subject to the license set forth in Section 1.1, and is subject to all of the terms of this Agreement.
2. License and Sublicense Limitations. The license granted in Section 1 is conditioned upon your compliance with the following limitations:
2.1 Reverse Engineering. You may not decompile, decipher, disassemble, reverse engineer or otherwise attempt to access source code of the Content, except as expressly permitted by applicable law notwithstanding this limitation.
2.2 No Distribution, Rental or Transfer. You may not distribute, rent, lease, lend, transfer, sublicense, disclose or otherwise provide the Content to any third party other than as contemplated herein.
2.3 Proprietary Notices. You may not remove any proprietary notices or labels on the Content or any copy thereof.
2.4 Non-Permitted Uses. Without limiting any of the foregoing, you may not make any use of the Content in any manner not expressly permitted by this Agreement.
2.6 Parametric may modify this Agreement at any time with or without notice. You can review the most updated version of the Agreement online at https://customcore.parametricportfolio.com/Home/TermsOfUse. If a subsequent version of the Agreement or additional terms are unacceptable to you, you must terminate the Agreement by ceasing to use the Content. If you continue to use the Content after any modification of the Agreement, you will be deemed to have accepted the modifications.
3. Reservation of Rights and Ownership. You acknowledge that the Content constitutes the valuable trade secrets of Parametric, and is being licensed by Parametric, and not sold. Except the Client Information and the Third Party Data, Parametric owns all rights, title and interests in and to the Content, including without limitation, all patents, patent registrations, patent applications, business processes, copyrights, data rights, trademarks, trade names, service marks, service names, trade secrets, know-how, rights in the foregoing, or other similar right arising or enforceable under any U.S. law, foreign law, or international treaty regime (“Intellectual Property Rights”) embodied therein. Parametric reserves all rights in the Content that are not expressly granted in this Agreement. You shall not take any actions inconsistent with Parametric’ ownership of all rights in the Content or knowingly or negligently permit an End User to take any such actions. Accordingly, except as may be specifically set forth herein or otherwise agreed by the Parties in writing, you agree not to, directly or indirectly, without the prior written consent of Parametric:
(i) sublicense, sell, lease or otherwise transfer or grant any third-party access to any portion of the Content except as expressly set forth herein;
(ii) modify, translate, distribute, or create derivative works based on the Content;
(iii) disassemble, decompile, reverse engineer the Content or any portion thereof, or otherwise attempt to derive or construct source code or other trade secrets from the Content;
(iv) remove or alter any copyright, trademark, patent or confidentiality notice or legend included in the Content or affixed to tangible media embodying the Content;
(v) merge the Content with other software; or
(vi) knowingly or negligently permit any third party to do any of the foregoing.
Except as otherwise permitted herein, you are prohibited from providing copies of the Content, or making the Content accessible to third parties, except, subject to the terms of Section 9 below, you may provide reports to Your Clients. You shall treat the Content in a confidential manner and prevent disclosure of the Content to third parties other than Authorized Users. You shall cause anyone who has authorized access to the Content to comply with the terms herein.
4. Injunctive Relief. You acknowledge and agree that any violation of any of your obligations under this Agreement would cause Parametric irreparable harm for which there would be no adequate remedy at law. Accordingly, Parametric shall be entitled to preliminary and other injunctive relief against any such violation without any requirement to post a bond; provided, however, the foregoing does not constitute a consent by you to, or otherwise prohibit you from challenging, whether a violation of a term or condition in this Agreement has occurred. Such injunctive relief shall be in addition to any other rights or remedies that Parametric may have at law or in equity including, but not limited to, damages.
5. Termination. This Agreement will automatically terminate upon your breach of any of the terms and conditions of this Agreement. In the event of termination, you must immediately destroy all copies of the Content, and the following Sections of this Agreement will survive: Sections 3, 6, 7, 9 and 10. Parametric may, in its sole discretion and without prior notice, terminate your access to the Content or restrict the rights in whole or in part associated with the username and password assigned to you.6. NO INVESTMENT ADVICE; DISCLAIMERS; AND LIABILITY LIMITS
7. Representations and Warranties. You represent and warrant to Parametric as follows:
(i) you are located in the United States of America,
(ii) you provide financial advice or brokerage or trust services to various clients and are an investment advisor registered with the United States Securities and Exchange Commission (“SEC”), or are eligible to provide investment advice or recommendations pursuant to an exemption from registration with the SECor registration with a state or federal securities or bank regulator,
(iii) to the extent you access Content that contains Client Information, you will access Content related solely Your Clients,
(iv) each time you access the Content, Your Clients have authorized you to access the Client Information and have not terminated such authorization,
(v) Parametric is registered with the SEC under the Investment Advisors Act of 1940, as amended (“Advisors Act”) and has filed a Form ADV Brochure, which contains material disclosures relating to Parametric’s provision of investment management services and may be access through this link, and
(vi) if you use the Content in any meetings with any persons, you will ensure that such persons are sufficiently sophisticated to understand the Content, and you will not alter or modify the Content, including any disclosure language associated with such Content, in any way without Parametric’s prior consent.
You acknowledge and agree that access to the Content is conditioned on the accuracy of the foregoing representations and warranties. In the event that any of the foregoing representations and warranties become inaccurate, you shall promptly notify Parametric and cease accessing the Content.
8. Access Credentials. You agree that the user name or password assigned to you shall be used solely by you, and, in the event that you are not a natural person, that all Authorized Users or any other person with access to or knowledge of the user name or password assigned to you shall be fully authorized to access such Content by you and/or your contract with Your Client.
YOU SHALL NOT PROVIDE THE USER NAME OR PASSWORD ASSIGNED TO YOU TO ANY CLIENT OR POTENTIAL CLIENT. YOU ACKNOWLEDGE AND AGREE THAT PARAMETRIC IS SUBJECT TO THE ADVISORS ACT OF 1940 AND THE RULES PROMULGATED THEREUNDER, AS AMENDED (“ADVISORS ACT”), WHICH IMPOSES RESTRICTIONS ON THE PARAMETRIC’S INTERACTIONS WITH ITS CLIENTS AND THE GENERAL PUBLIC.
YOU SHALL IMMEDIATELY NOTIFY PARAMETRIC OF ANY ACTUAL OR SUSPECTED UNAUTHORIZED USE OF THE USER NAME AND PASSWORD ASSIGNED TO YOU.
YOU SHALL IMMEDIATELY NOTIFY PARAMETRIC OF ANY CLIENT INFORMATION RELATING TO CLIENTS THAT HAVE TERMINATED THEIR RELATIONSHIP WITH YOU.
9. Client Reports. The Content may include performance reports or other reports designed to be provided to Your Clients. Notwithstanding anything to the contrary contained herein, Parametric intends that such reports be provided to Your Clients pursuant to the terms of such separate agreements that have been entered into between you and Parametric or Your Clients and Parametric.
10. Indemnification. You agree to indemnify, defend, and hold Parametric, its affiliates, and their respective officers, members, employees, representatives and agents, harmless from and against any and all losses, liabilities, judgments, suits, proceedings, claims, damages, costs, and expenses (including attorneys’ fees and court costs) arising from or in connection with (i) the use or misuse of the Content by you, or any other person utilizing any user name or password assigned to you, (ii) your violation of any of your obligations under this Agreement, (iii) any unauthorized access caused by use of the username and password assigned to you, including, without limitation, Content related to Your Clients, or (iv) any act or omission of you, your employees, contractors or agents with respect to this Agreement.
11. Compliance with Law; Export Restrictions. You will comply with all applicable international and national laws, rules and regulations that apply to the Content and your use of the Content, including the U.S. Export Administration Regulations, as well as end-user, end-use, and destination restrictions issued by U.S. or other governments. You acknowledge that the Content is of U.S. origin and subject to U.S. export jurisdiction.
12. Governing Law. This Agreement shall be governed by, subject to, and construed in all respects in accordance with the laws of the State of Washington, without regard to the choice of law provisions thereof. You irrevocably agree that any legal action, suit or proceeding brought by it in any way arising out of this Agreement must be brought solely and exclusively in the courts of the State of Washington.
13. General. The section titles in this Agreement are used solely for the parties’ convenience and have no legal or contractual significance. Parametric’s failure to act with respect to a breach by you or others does not waive its right to act with respect to subsequent or similar breaches. No waiver of any provision of this Agreement will be effective unless it is in a signed writing, and no waiver will constitute a waiver of any other provision(s) or of the same provision on another occasion. If a court of competent jurisdiction holds any term, covenant or restriction of this Agreement to be illegal, invalid or unenforceable, in whole or in part, the remaining terms, covenants and restrictions will remain in full force and effect and will in no way be affected, impaired or invalidated. You may not assign, transfer or sublicense this Agreement or your rights (if any) under this Agreement. This Agreement will be binding upon all successors and assigns. This Agreement constitutes the entire agreement between you and Parametric with respect to the Content (including support services (if any)) and merges all prior and contemporaneous communications and proposals, whether electronic, oral or written, between you and Parametric with respect to the Content.
If you have any questions about this Agreement, or want to contact Parametric for any reason, please direct all correspondence to:Parametric Portfolio Associates LLC
Parametric has been offering client-driven, index-based portfolios that incorporate ESG criteria for more than fifteen years now. Our robust and continually evolving menu of ESG screens and licensed indexes gives investors a wide range of portfolio design choices. We have designed a series of risk-controlled, index-like exposures that can be used as a core equity portfolio allocation while aligning with common responsible investing themes.
The risk-adjusted returns of factor strategies can look quite attractive. However, the turnover associated with them can significantly reduce their after-tax excess returns. In this research brief, we share the results of our after-tax study of these strategies. From an after-tax perspective we find that taxes can erode much of this return, but a systematic tax management process can help to mitigate tax drag.
Exchange traded funds, or ETFs, are popular vehicles for investors seeking passive, index-based market exposures. Despite their popularity, there are structural issues which make them less than ideal for many high-net-worth investors. A tax-managed, separately managed account can be designed to deliver the same diversified index-like exposure while offering increased after-tax returns.