Looking for the right exchange traded fund among the vast number trading in the markets may be daunting, but financial advisors can look to a growing industry of ETF strategists to access customized ETF portfolios to better manage market risks.
ETF Trends publisher Tom Lydon spoke with Lee Kranefuss, Founder & Co-Chairman of 55 Capital Partners, at the Inside ETFs conference that ran Jan. 22-25, 2017 to talk about the growth of the ETF industry.
“What really amazes me is the number of ETFs there are, not so much how much money has flowed into them,” Kranefuss said.
There are now 1,997 U.S.-listed exchange traded products with over $2.7 trillion in assets under management, according to XTF data.
“Early on, we thought there might be a hundred different indexes that people cared about,” Kranefuss said. “Now, ETFs have grown a lot further than that, but at this point, I find many advisors we talked to are overwhelmed. There’s just too many to figure out as we get finer and finer slices of the onion.”
With a greater number of ETF strategies and options available, there is a growing need for education to help investors and advisors better understand the investments available to them and how to most efficiently position their portfolios.
“People talk about the experience they get,” Kranefuss said. “They see many products – they’re labeled one way, think it will do one thing and then it performs somewhat differently, and so it’s very hard for people to even get ahead of all of them.”
Consequently, advisors may turn to a growing group of ETF strategists and firms like 55 Capital as a way to gain exposure to customized portfolios of ETFs to achieve a specific goal for their clients.
“We offer dynamically managed, tax efficient, 100% ETF portfolios, and we take the heavy lifting of doing all that research,” Kranefuss said.
At 55 Capital, advisors may find dynamic, risk-managed portfolios comprised of low-cost and efficient ETFs to better manage market volatility. Specifically, the ETF strategist offers dynamic macro, global allocation, global equity and alternatives portfolios to provide access to various market segments and styles.