At the Morningstar Inc. (NasdaqGS: MORN) second annual Exchange Traded Fund Invest Conference in Chicago, Morningstar announced it is working on a system that will research and rank managed portfolios later this year.
According to a Morningstar press release, a growing number of ETF managed portfolios, which are separate account strategies that hold more than 50% of assets in ETFs, are being created. Around 30% of the 330 ETF managed portfolios, totaling $22 billion in assets, launched within the past three years.
These types of portfolios appeal to advisors who want to utilize ETFs but do not feel comfortable monitoring the investments themselves.
“ETF managed portfolios are a burgeoning area. By expanding the research available for ETF managed portfolios, we aim to increase the awareness and transparency of this rapidly growing area of the industry,” Andrew Gogerty, ETF managed portfolios strategist for Morningstar, commented. “These strategies typically offer greater tactical flexibility than a traditional individual security separate account strategy, but no other firm is providing commentary, research, and education for advisors in this area. Our goal is to develop a suite of analytics and commentary that will help advisors and other investors who are sifting through these investment options.”
Under Morningstar’s criteria, ETF managed portfolios will be ranked by performance against peers of the same classification, which will be different from the Morningstar Category Classification for mutual funds.