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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