According to Tom Wald, Transamerica Asset Management’s chief investment officer Asset Management’s chief investment officer, “ETFs can add value as underlying holdings in variable annuity strategies that can benefit from tax-deferred investing. This can potentially generate better returns over time.”[related_stories]
Unlike mutual funds, aided by their low expense ratios, ETFs that track U.S. equity indices have outperformed actively managed mutual funds on a consistent basis according to data from S&P Dow Jones Indices.
But Wald thinks smart beta is one of the most exciting within investing right now. He added that BlackRock had the individual ETFs tied to factor indices that showed a history of generating strong returns and reducing risk. In addition, the firm has a long history of managing asset allocation portfolios so Transamerica thought it was a great combination.
In March, half of those multi-asset managers surveyed by BlackRock iShares said that their clients are actively requesting that ETFs be used in their portfolios. Meanwhile, nearly 40% of respondents have a designated ETF due diligence expert responsible for evaluating the funds and providers. S&P Global Market Intelligence thinks both metrics speak to further usage of ETFs in the years ahead.
Todd Rosenbluth is Director of ETF Research for S&P Global Market Intelligence. Follow him on Twitter: @ToddSPGlobal.