ETF Trends
ETF Trends

Financial advisors have many different pins to juggle as they maintain their businesses. As a way to optimize their advisory firms, more are turning to customized exchange traded fund management portfolios in the separate accounts space.

On the upcoming webcast sponsored by PowerShares and State Street Global Advisors, Utilizing ETF Strategists to Enhance Your Advisory Business, Adam Grossman, Director of Tactical Strategy for RiverFront Investment Group, Robert D. Williams, Managing Director for Sage, and Brendan Clark, President of Clark Capital Management Group, help explain how advisors can gain an edge in today’s rapidly evolving investment landscape through the relatively nascent ETF strategist market.

According to Morningstar, there were 667 such strategies from 145 firms with $102 billion in assets under management as of June 2014, with existing managers still expanding on their current product offerings. ETF managed portfolios are investment strategies that hold more than 50% of assets invested in ETFs.

“Strategists are giving advisors and their clients access to institutional-caliber portfolios with daily liquidity and better transparency than most mutual fund offerings,” according to a PowerShares and SSgA research note, titled Partnering with ETF Strategists.

By partnering with an ETF strategist, advisors are able to enhance their practices. ETF strategists help advisors develop tactical and strategic asset allocations for short- or long-term portfolios. Additionally, since the ETF strategists monitor the portfolios, advisors are freed up to allocate more time toward client relationships and expanding their businesses.

Moreover, these ETF managed portfolios provide a more “personal performance” that more closely caters to a client’s needs. Specifically, State Street has found that investors are looking for value across four key components, including alpha seeking or beta generation, downside protection, liability management and income management.

“Many leading advisors are shifting away from the concept of relative performance against a benchmark and embracing strategies aimed at helping clients ahciev highly personal and specific goals,” according to the research note. “This ‘personal performance’ focus is in stark contrast to the approach taken by most active mutual fund managers, who are concerned with relative performance against a benchmark.”

Financial advisors who are interested in learning more about ETF managed portfolios and ETF strategists can register for the Wednesday, September 24 webcast here.

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.