After the impressive run over the past couple of months, equities and stock exchange traded funds are beginning to taper off, causing some fund managers to shift to defensive positions in their ETF managed portfolios.
“Over the past four weeks, we’ve been seeing fewer stocks participating in the current rally,” Brad Thompson, chief investment officer and his team at Stadion Money Management, said in a Wall Street Journal article. “We’re concerned about the sustainability of this recent upward trend and the vulnerability of market leaders if stocks remain choppy.”
Consequently, Sadion Managed Strategy, an ETF managed portfolio with $850 million in assets, has begun leaning toward a defensive posture. [Checking Under the Hood of ETF Managed Portfolios]
“Outsourcing of managed accounts between advisers has traditionally been done through mutual funds and individual securities,” Alois Pirker, research director at market tracker Aite Group, said in the article. “But as the [outside]portfolio-management market has grown, hiring managers with experience running ETF strategies has become an attractive alternative.”
Currently, Thompson’s team is diminishing exposure to small- and large-cap domestic stocks, as a result of current technical factors driving the markets, and taking a larger position in cash. [Fee-Based Advisors Driving Growth of ETF Managed Portfolios]