Investors can now invest in the growing number of customized managed portfolios based on exchange traded funds, but there are a few factors to consider when picking out an ETF strategist.
ETF strategists who handle these managed portfolios comprised of low-cost ETFs have different investment methodologies and styles. Consequently, investors with different investment objectives will need to consider a couple of factors when looking into ETF managed portfolios, writes Ari I. Weinberg for the Wall Street Journal.
ETF managed portfolios are a growing segment of the separate accounts space, with a class of so-called ETF strategists that help select ETFs from the nearly 1,600 options available on the market. As of the end of 2013, there were 648 different strategies offered by 153 firms, with $96 billion in assets under management, according to Morningstar data. [ETF Managed Portfolios Gain Traction]
An investor’s financial advisor can use a ETF managed portfolio service.
“A financial adviser should consult on key topics such as how a strategy can help to achieve a client’s goal,” Ling-Wei Hew, an analyst at Morningstar who follows ETF portfolios, said in the article.
ETF managed portfolio strategies come in many different flavors. Some ETF strategists provide a complete, all-in-one diversified portfolio, and others can focus on sectors or countries. Moreover, ETF strategists can actively buy or sell to maximize potential gains in more tactical portfolios that capture short-term moves while some can take a more long-term, strategic approach, or a combination of both tactical and strategic strategies.