Morningstar has rolled out new managed portfolios offered through financial advisors that feature exchange traded funds.
The Chicago-based company this week introduced a suite of new strategies to Morningstar Managed Portfolios, a fee-based discretionary investment management program.
The new strategies include active/passive, momentum ETF and global tactical ETF portfolios that were developed by Ibbotson Associates, according to a Morningstar press release. Ibbotson is a Morningstar subsidiary.
“We’re thrilled to make the Ibbotson portfolios available to the more than 30,000 independent financial advisors who have access to the Morningstar Managed Portfolios platform,” Jeffrey Ptak, president and chief investment officer of MIS, said. “Advisors have increasingly sought low-cost, active investing solutions that employ exchange-traded funds. We think they’ll find plenty to like in the Ibbotson portfolios, which further broaden our lineup while putting Ibbotson’s institutional capabilities within their clients’ reach.”
The Ibbotson Active/Passive Portfolios will include ETFs in areas that are less developed for active managers and actively managed funds backed by managers who are more likely to add value.
The Momentum ETF Portfolios will utilize trends in investment returns by exploiting patterns through under- or over-weighting asset classes based on proprietary momentum signals.
The Global Tactical ETF Portfolios follows momentum and “mean-reversion” – performance tends to revert to their historical averages over the long-term – by buying contrarian investments and selling popular assets.
“All three new strategies start with robust Ibbotson asset allocations and then attempt to add additional value through active-risk budgeting or tactical modeling to exploit the momentum anomaly or momentum and mean reversion patterns,” Thomas Idzorek, chief investment officer and research director for the Morningstar Investment Management division, remarked.
For more information on active ETFs, visit our actively managed ETFs category.
Max Chen contributed to this article.