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Zacks Investment Management, a subsidiary of Zacks Investment Research, is a registered investment advisory firm that’s based in Chicago but serves clients across the U.S. and in Puerto Rico. The firm has almost 100 employees, with 10 serving in investment advisory roles, and manages over $6.2 billion in client assets. Though it primarily works with individuals and high net worth individuals, Zacks Investment Management also serves some institutional investors.
The bottom line: Zacks Investment Management uses comprehensive in-house research from its parent company to create highly customized portfolios, which is its key focus, rather than broad financial planning services.
| Assets under management (AUM): $6,216,317,967 | |
| Minimum investment: $500,000 for traditional investment advisory services | |
| Individual investor to advisor ratio: 204:1 | |
| Fee structure: A percentage of AUM, fixed fees, performance-based fees | |
| Headquarters: 227 West Monroe Street, Suite 4350 Chicago, IL 60606 Website: www.zacksim.com Phone: 312-265-9266 |
All information included in this profile is accurate as of February 24, 2022. For more information, please consult Zacks Investment Management’s website.
While Zacks Investment Management has been in business since 1992, its parent company, the financial investment research company Zacks Investment Research, has been around since 1978. Zacks Investment Research is still the backbone of how the firm invests for its clients, as it is responsible for reviewing and analyzing research to make investment decisions.
Zacks Investment Research, which owns Zacks Investment Management, is in turn principally owned by Mitch Zacks, the firm’s CEO and a senior portfolio manager, as well as a trust for the Zacks family. Mitch Zacks has written two books on investing, “Ahead of the Market” and “The Little Book of Stock Market Profits.” He’s the primary portfolio manager at the firm and has developed many of its proprietary investment models.
The firm’s founder, MIT PhD Len Zacks, is known for his published work. An article he published in the Financial Analysts Journal in 1979 about using earnings estimate revisions for stock selection led to the creation of Zacks Investment Research as well as its subsequent innovations, including the EPS surprise, a concept still used across the investment industry.
Len Zacks also wrote a book called “The Handbook of Equity Market Anomalies.”
Zacks Investment Management provides customized investment strategies and services to a variety of investors. Its primary focus is on individual investors who don’t have a high net worth, as this group makes up the majority of the firm’s individual investor client base. Here’s a full list of the client types that Zacks Investment management serves:
The minimum investment required to work with Zacks varies depending on the type of account you want to open. The account minimum for Zacks Advantage, the firm’s robo-advisor service, is much lower than the minimums for its traditional investment services, outlined below:
Zacks Investment Management offers services for individual investors, financial professionals and institutional investors. For individual investors, the firm offers comprehensive wealth management, which includes detailed discussions about clients’ current financial situation and goals and the creation of a customized portfolio. Additionally, the firm offers Zacks Advantage, an online investment advisory program that invests mostly in exchange-traded funds (ETFs).
Zacks Index Services, a division of Zacks Investment Management, creates and manages quantitative investment models that are licensed and sponsors of unit investment trusts (UITs) and ETFs. These services used to only be available to institutional investors but are now available to individual investors as well.
For clients who request financial planning services, Zacks may refer them to third-party firms that will then provide these services rather than offering them directly.
Here is a list of services offered by the firm:
Zacks Investment Management describes its approach to investing as data-driven, with decisions made within a risk-controlled framework and checks and balances offered by its investment committee’s reviews and assessments. The firm leverages data from its parent company, Zacks Investment Research, which offers direct access to a large team of analysts, data sets and analytical tools.
In general, Zacks Investment Management strives to methodically reduce risk while improving returns. With a focus on stock-and-bond portfolios, the firm offers a plethora of specific investment strategies for clients. Which one is used for your portfolio will depend on your financial goals and your financial advisor’s recommendations. There are also private fund investment strategies offered, which are outlined in the table below alongside the firm’s numerous available strategies.
| Zacks Investment Management Funds and Strategies | |
|---|---|
| Strategy/fund name | Investment strategy |
| Zacks Quantitative Strategy | This stock-ranking model is based on earnings estimate revisions and earnings surprises. It purchases between 125 and 260 stocks and is rebalanced regularly. |
| Zacks Focus Growth Strategy | Focuses on growth-oriented stocks, with 50 to 100 stocks chosen across many different sectors. The Russell 1000 Growth Index is used as a benchmark. |
| Zacks International Equity Strategy | Invests in markets outside of the U.S., exposed to both developed nations and those with emerging markets. |
| Zacks All-Cap Core Strategy | Provides risk-adjusted returns and benefits that mirror either the S&P 500 index or the Russell 3000 index. |
| Zacks Dividend Strategy | Maximizes tax returns from dividends and capital appreciation. |
| Zacks Fixed-Income Strategy | A portfolio manager handles this type of account using a combination of corporate and government bonds through fixed-income ETFs. |
| Zacks MLP Strategy | Invests in Master Limited Partnerships through a combination of higher-than-average yields and appreciation potential. MLPs focus on energy-focused companies. |
| Zacks Energy Strategy | This strategy focuses on the energy sector that has positive risk/reward features. |
| Zacks Preferred Income Strategy | Concentrates on a mix of traditional, trust, and third-party trust preferred securities that allow investors to yield and generate a high amount of income. |
| Zacks All-Cap Core Fund | Invests in capital appreciation and secondly through dividends income. |
| Zacks Small Cap Core Fund | Looks into investing 80% of assets into small capitalization companies focusing on U.S. issuers of equity securities. |
| Zacks Dividend Fund | Focuses on capital appreciation and tries to invest 80% of net assets in equity securities of U.S.-based dividend-paying companies. |
| Small-Cap Core Strategy | Invests in equity securities of mostly small capitalization companies with a diversified growth portfolio. |
| Mid-Cap Strategy | The strategy for this one is capital appreciation by investing mostly in equities of medium market capitalization. |
| Zacks Premier Select Strategy | This strategy focuses on companies with positive earnings estimates. |
| Zacks Global Tactical Strategy | Strategically invests in various asset classes and limit drawdowns in the majority of markets. |
| Zacks Small-Cap Value Strategy | Screens stocks based on quality and valuation. Companies are ranked in each sector before being optimized and applied to a portfolio. |
| Zacks Small-Cap Growth Strategy | Focuses on quality and sustainable earnings growth and portfolio managers qualitatively review before trading. |
| Zacks Advantage Program | Robo-advisor that uses asset allocation and ETF selection parameters created to customize investment strategies for clients. |
Zacks Investment Management earns money through asset-based fees, fixed fees and performance-based fees.
For asset-based fees, the rate you’ll pay depends on which strategy or fund you invest in, as well as how much money you are investing. How often you pay fees also varies by portfolio strategy, with some fees owed quarterly and others owed on a monthly basis.
Clients in a Retail Wealth Management Program, the firm’s traditional wealth management account are charged according to the following fee schedule:
| Retail Wealth Management Program Fee Schedule | |
|---|---|
| Assets Under Management | Fee Rate |
| Up to $500,000 | 1.80% |
| Between $500,000 and $1 million | 1.65% |
| Between $1,000,000 and $1.5 million | 1.50% |
| Between $1.5 million and $2 million | 1.45% |
| Between $2 million and $2.5 million | 1.35% |
| Between $2.5 million and $3 million | 1.30% |
| Between $3 million and $3.5 million | 1.25% |
| Between $3.5 million and $4 million | 1.20% |
| Between $4 million and $4.5 million | 1.15% |
| Between $4 million and $5 million | 1.10% |
| Between $5 million and $10 million | 1.05% |
| Over $10 million | 1.00% |
In addition, these clients also may pay other fees. Accounts that are held by FOLIOfn Investments, an online discount broker, are subject to a number of additional fees.
Outside of FOLIOfn-related fees, clients may also pay an account administrative fee if they use a Zacks Investment Management investment consultant. Clients with individual fixed-income securities, such as treasury, corporate and municipal bonds, may pay additional quarterly fees that are based on a percentage of assets under management and range from 0.25% to 0.65%.
For other strategies available to individual investors, the asset-based fee schedules are as follows:
| Global Tactical Strategy (Retail) | |
|---|---|
| Assets Under Management | Fee Rate |
| Up to $500,000 | 0.95% |
| Between $500,000 and $1 million | 0.90% |
| Between $1 million and $4 million | 0.80% |
| Over $4 million | 0.70% |
| Premier Select Strategy (Retail) | |
|---|---|
| Assets Under Management | Fee Rate |
| All assets under management | 1.50% |
| Zacks Strategies Direct | |
|---|---|
| Assets Under Management | Fee Rate |
| Up to $500,000 | 0.99% |
| Between $500,000 and $1 million | 0.90% |
| Between $1 million and $2 million | 0.80% |
| Between $2 million and $5 million | 0.70% |
| Over $5 million | 0.60% |
| Zacks Advantage | |
|---|---|
| Assets Under Management | Fee Rate |
| $5,000 to $99,999 | 0.70% |
| $100,000 to $250,000 | 0.50% |
| Over $250,000 | 0.35% |
The firm has separate fee schedules for institutional clients, with rates varying depending on which strategy is used.
Clients may pay additional fees alongside the asset-based fee they are charged. This includes wrap fees for clients who are involved in wrap fee programs, which are arrangements in which a certain set of fees are offered under one bundled fee. The wrap fee is an annual fee that is charged quarterly based on a price negotiated by Zacks Investment Management and the wrap sponsor.
Additionally, qualified clients are charged performance-based fees that Zacks Investment Management says in its Form ADV are “either based on the total return or above the benchmark return measure against an index.” Clients will be able to negotiate their rate depending on the amount of assets being managed and how long the account has been open. Fees don’t exceed more than 20% of the total annual return of the account and are billed monthly.
Aside from the fees charged by the firm, clients may also incur trading costs and custodial fees.
Zacks Investment Management doesn’t have any disciplinary disclosures within the last decade to report. All Securities and Exchange Commission (SEC)-registered firms are required to report any actions against them, including any criminal, civil or regulatory actions. If a firm has any of these, it is listed on its Form ADV, which is publicly available through the SEC.
For more information on Zacks Investment Management, you can go to its Investment Adviser Public Disclosure (IAPD) page.
Zacks Investment Management has offices in the following locations:
Zacks Investment Management may be a good fit for those interested in taking advantage of the firm’s in-house research, comprehensive investment strategies and custom-built portfolios. However, they may pay more for wealth management than at other firms, especially if they don’t have a few million dollars in assets under management. Additionally, advisors in some cases can receive performance-based fees and other types of compensation through affiliate relationships, which could create potential conflicts of interest.
Before selecting a financial advisor, it’s important to consider your financial situation and to compare several different options. Be sure to take the time to research multiple firms to ensure you find the right advisor for you.fe
