Exchange traded fund allocators are quickly taking market share from traditional mutual fund managers, according to a report this week. Investors are keen to the trend toward managers who use ETFs as core holdings in a stand-alone portfolio, spreading capital across asset classes.
“The growth in this area is undeniable, and it’s not a fad,” said Scott Burns, head of ETF research for Morningstar, reports Christopher Condon for Bloomberg.. “There’s a shift going on from seeking outperformance on an individual-company basis to seeking it on a macro basis.”
“ETFs allow us to replicate a core family office portfolio,” said Chris Wyllie , co-manager of Iveagh Wealth Fund, according to the Bloomberg report. “I’m not sure you could have done that five years ago.”
The trend toward ETF use has sparked the general movement toward index-based investments over the past few years. The general idea that investors want to use ETFs is indicative that they are not interested in a completely passive approach anymore. Asset allocation that works today, may not be suitable in a few months, or even a few weeks. [Defensive ETF Plays.]