Firms continue to pump out ETFs but packaging the funds into portfolios for advisors and investors will be a big driver of the industry’s continued growth.
According to a recent Morningstar report, assets in ETF managed portfolio strategies have increased 30% year-to-date as of June 2012 and expanded 48% since Sept. 2011 when the company first announced its plans to rank and research ETF managed portfolios.
ETF managed portfolios usually have more than 50% of portfolio assets invested in ETFs.
“They represent one of the fastest-growing segments of the managed account universe,” Morningstar said. “Professional money managers are packaging portfolios of ETFs into investment strategies to meet a wide array of investor demands, and thanks to the continual development of individual ETFs they are providing access to both stand-alone investment strategies and one-stop, complete solution offerings.”
Morningstar ranks and provides research for 490 ETF managed portfolios from 120 firms with $50 billion in assets under management as of June 2012.
As we see a continued shift toward fee-based advising, financial advisors are investing in low-cost, broad-based investments such as ETFs.
BlackRock CEO Larry Fink says said the firm is the most excited about the opportunities in ETFs since it acquired the iShares business from Barclays.