Strategies offered by ETF manage portfolios allow a new breed of so-called ETF strategists to customize tactical short-term or strategic long-term portfolios for advisors and investors in a changing market.
Specifically, ETF managed portfolios are investment strategies that hold more than 50% of assets invested in ETFs. A group of ETF Strategists package portfolios of ETFs into investment strategies to meet a wide range of investor demands, providing stand-alone investment strategies or a one-stop complete offering. Many portfolios can be adjusted to adapt to changing market conditions and most employ a rules-based process based on technical or quantitative factors.
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.
F-Squared has included strategic beta ETFs in its portfolios, such as the First Trust AlphaDEX ETFs, which select holdings based on growth factors like 3-, 6- and 12-month price appreciation, sales to price and one year sales growth, along with value factors like book value to price, cash flow to price and return on assets. [ETF Managed Portfolios on the Rise]
ETF Trends editorial team contributed to this article.