In the separate accounts space, exchange traded managed portfolios are experiencing some growing pains as a volatile quarter pushed investors to the sidelines, with one particular strategy taking the brunt of the hit.

By the end of the third quarter, there were 677 strategies from 143 firms with $96 billion in assets under management, or a 6% pullback from the three months ended June, according to Morningstar.

“The third quarter was a rough one for global equity markets. Given that U.S. Equity strategies continue to hold the lion’s share of assets, the landscape took quite a hit this quarter as six out of the nine Morningstar Style Box categories posted negative returns–with the exception of large caps,” writes Morningstar ETF Managed Portfolios analyst Ling-Wei Hew.

ETF managed portfolios are investment strategies that hold more than 50% of assets invested in ETFs and represented one of the fastest growing segments in the separate accounts space. Specifically, ETF managed portfolios offer three major investment themes: tactical, strategic and hybrid mix. The tactical offerings provide short-term plays to capitalize on investment opportunities that are forming, whereas the strategic play provides long-term allocation across sectors and asset classes. Additionally, the hybrid mix includes a combination of tactical and strategic elements. [Incorporating ETF Managed Portfolios into Your Advisory Business]

The Windhaven Diversified Growth strategy remained the largest offering in the space with $9.3 billion in assets under management, followed by F-Squared Premium AlphaSector Index strategy with $7.9 billion and Good Harbor Tactical Core US strategy with $6.1 billion.

The Good Harbor Tactical Core US, previously the second largest strategy over the second quarter, saw assets plunge 36.7% from $9.6 billion due to a combination of poor returns and extended outflows. The tactical equity strategy declined 18.3% over the first three quarters of 2014.