Advisors are using active management for their typical client portfolios, according to results for a post-viewer poll following an on-demand VettaFi webcast, indicating a stronger than expected interest in active strategies among investors and advisors. All told, nearly 90% of viewers of the “Dividend Growth Opportunities: Identifying Growth-At-A-Discount” webcast said they incorporated actively managed strategies in their typical client portfolios.
Broken down, more than half (56.7%) described their standard client portfolio as made up of actively managed equity and fixed income strategies, while 17% said their client fund portfolios were typically made up of active fixed income and indexed equity strategies. Meanwhile, 15.2% said they were often comprised of active equity and indexed fixed income. Only 11.1% said their average client portfolio was solely made up of index funds and had no active strategies.
While this data is far from definitive, it does suggest that active strategies are perhaps being deployed at a higher proportion than the ETF asset base implies.
“Even though there’s a mid-single-digit percentage of ETF assets tied to actively managed strategies, many advisors are already building client portfolios through active management,” said VettaFi head of research Todd Rosenbluth. “Some of those strategies likely are using legacy mutual funds, but this VettaFi data gives me confidence that there’s room for growth for recent entrants into the active market.”
Active managers have been on a winning streak this year, with almost 70% of the 2,850 actively managed U.S. stock mutual funds beating the S&P 500 Index. On average, roughly 35% of managers have outpaced the S&P 500 in any calendar year, based on annual results going back to 2007.
Legacy mutual fund managers like JPMorgan Asset Management, Fidelity, and Capital Group have recently entered the ETF space with actively managed products. Many of these managers are realizing that if they want to compete with the likes of BlackRock, Vanguard, and State Street Global Advisors, they’re going to need to offer active strategies.
T. Rowe Price offers a suite of actively managed ETFs. T. Rowe Price has been in the investing business for over 80 years through conducting field research firsthand with companies, utilizing risk management, and employing a bevy of experienced portfolio managers carrying an average of 22 years of experience.
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