Many firms are managing less then $1 billion and pooling the capital into asset allocation strategies from individual client accounts. Most of the high-net worth clients and institutional investors are contenders for the asset allocation strategy with ETFs, according to the report.
Some managers argue that the asset allocation strategy is too similar to market timing. The outlook is too short -term and lacks any long term point-of-view. [How ETFs Are Changing Investing, Markets.]
“To the extent that some managers are trying to replace active security selection with active allocation across sectors, that is another name for market timing,” said Edward C. Bernard , vice chairman of Baltimore-based T. Rowe Price Group. “History suggests that is rarely a durable strategy.”
Tisha Guerrero contributed to this article.
