A number of factors have helped fuel the growth in ETF managed portfolios, such as increased client demand for ETFs, more precise exposure to market segments through ETFs, greater usage of goal-based strategies and fee litigation risk reduction.
However, Gamba warned that there are some hurdles the ETF managed portfolio space still faces. For instance, more education and due diligence are required, longer term historical performance and benchmarking will be needed, some portfolios lack a client’s desired ETF and some active bias against ETFs.
John Hyland, Head of ETF Investment Strategists at BlackRock, noted that ETF managed portfolios help financial advisors take items off their plate so that they may allocate more time to growing their advisory business. For instance, ETF investment strategists who managed the portfolios can help determine asset allocation of specific strategies, monitor securities, fulfill tax loss selling requests, meet cash flow needs, watch and rebalance accounts, and offer varying strategies based on risk profiles. Consequently, with the ETF strategists handling these ETF managed portfolios, adivsors can increase their time with clients.
Financial advisors who are interested in learning more about multi-asset strategies in ETF managed portfolios can view the webcast here on demand.