“This tactical ability to quickly change a portfolio profile can be a double-edged sword,” the study said. “On the one hand, the investment managers can nimbly and cheaply reposition a strategy to adjust to an ever more rapidly changing investment landscape. On the other hand, it [can be difficult]to choose the most suitable strategies… and properly frame potential return expectations.”
Nevertheless, ETF managed portfolios have outpaced the average mutual fund in several categories, such as all assets, global balanced and global equities, over the 12 months through last September, according to Morningstar data. [How to Use ETFs in a Trend-Following Strategy]
Form more information on ETFs, visit our ETF 101 category.
Max Chen contributed to this article.