As the number of registered investment advisors grows, many have increased allocations to ETFs as an easy and cost-effective way to invest in any market segment.
More recently, the investment industry has created ETF model portfolios that offer clearly defined investment disciplines. Morningstar currently tracks over 490 strategies from 120 firms with about $50 billion in assets under management as of June 2012. Since September 2011 through June 2012, the number of strategies in the market has grown 48%.[Fee-Based Advisors Driving Growth of ETF Managed Portfolios]
“I believe that the growth in Model Builders will accelerate as firms develop their track records, and focus on promoting their strategies,” Davidow said.
“I believe that ETFs will continue to evolve and grow over time,” Davidow added. “Growth will likely come from product innovation, broader acceptance from advisors, and the growth of model builders. How large and how fast the growth will be is debatable.”
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Max Chen contributed to this article.