“A tactical allocation strategy only works when you have underlying funds that you can easily, quickly rebalance in a cost-effective way,” Rolph said.
ETFs trade like stocks on an exchange, allowing investors to utilize the tool throughout normal trading hours.
Moreover, some managers argue that advisors are better off targeting asset classes rather than individual securities. [Augmenting Portfolios with ETF Managed Accounts]
“Markets are relatively micro-efficient and macro-inefficient,” Stephen J. Cucchiaro, chief investment officer of Windhaven Investment Management, a subsidiary of Charles Schwab, said in the article. “There’s more value in picking asset classes correctly than individual stocks. Maintaining a static portfolio of asset classes and picking individual securities is exactly the opposite of what you should do.”
For more information on the ETF industry, visit our current affairs category.
Max Chen contributed to this article.