By using ETFs, advisors can take control of a clients portfolio to tailor them to an optimal fashion. This way the advisor has a complete view of a client’s overall investment goal and he or she would not have to explain why the fund performed as it did because the client would be on the same page.
Additionally, with all index funds, including ETFs, the investments will try to reflect an underlying benchmark, which helps negate the need for a manager to tend to the day-to-day portfolio management. Essentially, a portfolio of ETFs is on auto-pilot. Consequently, the advisor does need to monitor, analyze and adjust their client portfolio according to the objectives. [Active ETFs Meet Innovation.]
For more information on actively managed funds, visit our actively managed ETFs category.
Max Chen contributed to this article.