Part of BlackRock’s strategy is to offer model portfolios including ETFs as a way to help advisors combine active management and passive products, Ignites reports.
Some advisors have been using ETFs for years to implement asset-allocation models. The ETF structure is “by far the best way” to invest in broad areas of the market, says Steve Cucchiaro, chief investment officer at Windhaven Investment Management, a subsidiary of Charles Schwab (NYSE: SCHW). [Windhaven Chief: Why ETFs are the Best Portfolio Building Blocks]
In the ETF managed portfolio space, there were 500 strategies through June with 48% asset growth and $50 billion in assets, says Andy Gogerty, ETF managed portfolio strategist at Morningstar. Small firms are building ETF managed portfolios for their own clients as well as for other advisors who want to spend more time on financial planning with individuals they work with. [Advisors Like ETF Managed Portfolios for Low Costs, Diversification]
“As advisors increasingly incorporate ETFs and passive investments into their fee-based portfolios — to the tune of 8.7% of all fee-based portfolio assets, according to Cerulli Associates — model portfolios and managed accounts are an increasingly popular tool to blend active and passive,” Ignites reports. “While managed accounts traditionally are the domain of separate account managers, ETF model portfolios are designed by product providers, brokerage home offices and third parties.”