Given the recent bouts of volatility, ETF investors should be thinking about ways to manage their downside risk as opposed to continued high return generation.
“I think that the conversation has changed from a return perspective to a risk managed approach,” Alex Pire, Head of Client Portfolio Management at Seeyond, Natixis Investment Managers, said at the Charles Schwab IMPACT 2018 conference.
“Most of the time, advisors are sort of shining light, if you will, for their clients and they’re really supposed to help their clients remove the behavioral biases that they might have to be sort of concerned about the market. So I think advisors are staying very calm. They’re understanding that volatility is just returning at this point in time. The conversation is certainly shifting to a more risk managed approach,” Pire added.
As a way to better manage potential market risks down the road, investors may turn to actively implemented quantitative strategies that try to provide better exposure to the changing market conditions. For example, Natixis Investment Managers provides actively managed Natixis Loomis Sayles Short Duration Income ETF (NYSEArca: LSST) and the Natixis Seeyond International Minimum Volatility ETF (NYSEArca: MVIN) that have adapted time-tested strategies into dynamic ETF strategies.