ETF managed portfolios are in high demand as advisors seek tactical and global asset allocation solutions. This is one of the fastest growing segments of the the managed-account space.
According to Morningstar, ETF managed portfolios assets tracked by the investment researcher expanded 60% in 2012. The firm currently follows 530 such strategies from 125 firms with $63 billion in assets under management. [Managed ETF Portfolios are Gaining Traction]
Looking at the ETF managed portfolio breakdown, global strategies make up 64% of assets in this space, and global all asset strategies continue to attract interest from advisors and institutions. [Morningstar’s Model ETF Portfolio for Younger Investors]
While Charles Schwab’s Windhaven remained a large component in global all-asset strategies, Morningstar found stronger growth in equity strategies, particularly U.S.-focused offerings, over 2012.
U.S.-focused strategies and equity offerings still make up the largest asset breadth, accounting for $26 billion in assets. Currently, equity strategies make up 42% of ETF managed portfolios, compared to all-asset strategies at 36%, as the largest asset breadth category.
“While the trend of the largest strategies garnering top asset flows continued, a second stable of smaller strategies continued to gain asset growth momentum as various platforms and other decision-makers look to diversify their product offerings and investment lineups,” Andrew Gogerty, ETF managed portfolio strategist at Morningstar, said.
Morningstar is also beginning to receive strategy information from UBS, headed by Mark Price at UBS Global Investment Solutions.
“Morningstar expects this trend to continue as both third-party and in-house strategies will be forced to provide better information to advisors and institutional investors for analysis against both in-house and third-party alternatives,” according to a research note.
For more information on the ETF industry, visit our current affairs category.
Max Chen contributed to this article.