Multi-asset portfolios have become more prevalent among ETF offerings, even with several actively managed “Diversified Portfolio” funds now in the marketplace as well as a number of passive offerings.
These funds are typically designed to be truly tactical in nature, having the ability to shift assets into equities, fixed income, and even alternative investments depending on market views, momentum factors, and such.
Most of these funds are reasonably new to the market, and thus are not likely household names among portfolio managers and moreso among retail ETF investors, but they are building track records as we speak and live trading histories.
Funds that come to mind in this space include the largest in terms of AUM, MDIV (First Trust Multi-Asset Diversified Income, Expense Ratio 0.60%), as well as iShares’ suite of “Allocation” funds, (AOR, AOM, AOA, AOK, Expense Ratio 0.31%).
State Street recently entered the arena with INKM (SPDR Income Allocation, Expense Ratio 0.70%) and iShares launched another focused product in the space in early 2012 with IYLD (iShares Morningstar Multi-Asset Income, Expense Ratio 0.60%).
Moreover, several actively managed if not quasi-active/factor based Multi-Asset/Diversified strategies have been launched in ETF form and are noteworthy as well, including GTAA (Cambria Global Tactical ETF, Expense Ratio 1.41%), PERM (Global X Permanent ETF, Expense Ratio 0.49%), GSMA (ALPS/GS Momentum Builder Multi-Asset, Expense Ratio 1.14%), MATH (AdvisorShares Meidell Tactical Advantage, Expense Ratio 1.58%), GIVE (AdvisorShares Global Echo, Expense Ratio 1.70%), RRGR (AdvisorShares Global Alpha & Beta ETF, Expense Ratio 1.40%).
In all, there are twenty ETFs that fall in this category. The growth in the sector in terms of offerings across a rather wide spectrum of ETF issuers is impressive, as is the timeliness factor in that ETF investors are becoming more aware of the usefulness of a tactical approach in at least part of their overall portfolio makeup. Thus, live performance will continue to build in this space and help separate the wheat from the chaff over time.
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