Exchange traded fund strategists have put a face to the ETF industry, helping investors back experienced asset managers with a strong conviction in the marketplace. On Friday, Windhaven Investment Management, one of the largest ETF portfolio managers, announced that it is appointing Liz Ann Sonders as the new chair of its Investment Committee.
“Liz Ann brings a wealth of experience and knowledge on investment strategy and the markets and a deep understanding of Windhaven’s unique investment approach,” Bryan Olson, President of Windhaven Investment Management, said in a press release. “In her role as Chief Investment Strategist at Schwab, she has been highly sought after for her macroeconomic and securities markets expertise, appearing regularly on national media and serving in 2005 on the President’s Advisory Panel on Federal Tax Reform.”
Sonders will be stepping in, as Steve Cucchiaro, the founder and former Chief Investment Officer, leaves the company after overseeing operations over the past three year period. Cucchiaro was ahead of his time, creating ETF portfolios and producing an admirable track record. You won’t meet a nicer guy.
In the ETF industry, there aren’t many charismatic characters behind fund strategies as many ETFs are passive, index-based offerings. However, ETF strategists help bring some personality to the industry. Investors can now put their trust in expert managers with some conviction in their eyes. [ETF Asset Managers Offer Up Their Own Unique Recipes]
Charles Schwab was smart to acquire Windhaven as it has been a good ride for both companies. Since Schwab’s 2010 acquisition, Windhaven’s assets under managemetn have ballooned to over $19 billion from $4.2 billion.
According to Morningstar’s Q1 report on ETF managed portfolios, Windhaven was the second largest firm by assets in the space after F-Squared Investments with $24.3 billion in assets.
Liz Ann is very talented and will do well in her new role. Expect to see more of Liz as she moves int a more hands on position. It will be interesting to see how this transition works, and we will be watching the relative performance of the Windhaven suite of ETF managed portfolios.
In the separate accounts space, ETF managed portfolios are quickly gaining traction as an easy way to track an investment strategy using the ETF vehicle. Wire houses are trying to modernize their separate account portfolios, shifting away from the older commission-based model and moving into fee-based compensation, which aligns with the favorable fee structure of ETF managed portfolios. [The Budding ETF Managed Portfolio Business]
The ETF managed portfolio space provides two main strategies: strategic and tactical portfolios. A strategical mix includes assets that are meant to provide incremental returns over the long haul, shifting only to adjust holdings. The tactical approach will show changes based on economic and market developments.
For more information on the ETF industry, visit our current affairs category.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.