Financial advisors who are seeking an edge can take a look at the quickly growing exchange traded managed portfolios space to utilize customized asset allocation tools and potentially enhance an advisory business.
In an attempt to help shed light on the new breed of ETF strategists behind ETF managed portfolios, ETF Trends and RIA Database hosted the first ETF Strategist Virtual Summit, a virtual conference experience on November 18.
On one of the panels, Michael Jones, Chairman and CIO of RiverFront Investment Group, said that while ETFs may be an easy-to-use investment vehicle, selecting an ETF is not a simple task as investors have to weigh the merits of the underlying benchmark and potential costs.
David Koenig, Investment Strategist at Russell Indexes, also mentioned that potential investors should understand indexing methodologies as no two are the same.
“Within each design category are several key attributes that can vary widely among indexes and produce meaningful differences in exposure even among indexes that target identical market segments,” Koenig said.
Consequently, an ETF strategist can step in to construct a portfolio of ETFs to capture market exposure as efficiently as possible. For instance, Jones points out that ETFs can act as a tactical tool in ETF managed portfolio to dial up or down exposure to a specific market.