ETF Trends
ETF Trends

Financial advisors seeking to expand their businesses can look to multi-asset strategies and exchange traded fund managed portfolios.

On the upcoming webcast, Why Popularity of Multi-Asset ETF Portfolios are Booming, Daniel Gamba, Head of iShares Americas Institutional Business at BlackRock, John Hyland, Head of ETF Investment Strategists at BlackRock, Robert Smith, President & Chief Investment Officer of Sage Advisory, and David Haviland, Managing Partner & Portfolio Manager at Beaumont Capital Management, will go over the growth in the separate accounts space, the rising demand for multi-asset investment solutions and the benefits of utilizing ETF managed portfolios.

BlackRock previously interviewed multi-asset managers at more than 40 asset management firms, and found that ETF managed portfolios and multi-asset strategies make up a much larger, and faster growing part of the asset management industry than previously believed.

ETF managed portfolios held about $350 billion in assets globally, including $60 billion in separately managed accounts of retail model portfolios, and $290 billion in variable insurance trusts, mutual funds, collective trust funds, institutional separate accounts and UCITS.


ETF managed portfolios are a quickly growing part of the separate accounts space. Fueling demand for ETF managed portfolios, clients are actively asking multi-asset managers to increase ETF allocations in their portfolios. Managers are also expanding their investment base with ETFs to meet specific goals. More active managers are also adopting ETFs due to the many benefits of the investment vehicle, such as low fees, deep liquidity, tax efficiency and as replacements for futures and to access broad asset classes.

There are now 1,879 U.S.-listed exchange traded products with over $2.2 trillion in assets under management, according to XTF data. The ongoing growth in the ETF space has been fueled by a slow exodus from the mutual fund industry. According to EPFR data, actively managed equity funds experienced $34.9 billion in net outflows globally this year, whereas global stock market ETFs, which passively track a benchmark index, have attracted another $7.6 billion, despite the volatility in the first quarter. The ongoing underperformance in active funds has accelerated a shift toward passive strategies like ETFs. Last year, ETFs brought in almost $200 billion while actively managed equity funds lost $124 billion.

Looking ahead, BlackRock projects that ETF managed portfolios could double to over $700 billion by 2020 as institutional investors increase allocations to these strategies. ETF managed portfolios could also account for 19% of multi-asset strategies by 2020, growing from the current 12.5% level [Read more: ETF Managed Portfolios Could Double to $700BN Globally By 2020].

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.

Financial advisors who are interested in learning more about multi-asset strategies in ETF managed portfolios can register for the Thursday, April 28 webcast here.

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