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Incorporating ETF Managed Portfolios into Your Advisory Business


Exchange traded managed portfolios are growing in the separate accounts space as financial advisors partner with ETF strategists to create customized asset allocation tools and optimize their advisory firms.

ETF managed portfolios are investment strategies that hold more than 50% of assets invested in ETFs and represent one of the fastest growing segments in the separate accounts space. As more investors and advisors adopt ETFs, there is a greater need for assistance in maximizing the potential benefits of the relatively new investment vehicle, compared to traditional asset allocations.

In order to help shed light on the new crop of ETF strategists and the best practices for incorporating ETF managed portfolios into an advisory businesses, ETF Trends and RIA Database are hosting the first ETF Strategist Virtual Summit, a virtual conference experience that advisors can experience at the comfort of their own home or office, on Tuesday, November 18. [How ETF Strategists Can Help Your Advisory Business]

For instance, on the upcoming ETF Strategist Virtual Summit, Leo Pusateri, President and CEO of Pusateri Consulting and Training, and Sue Thompson, Managing Director and Head of Registered Investment Advisor Group at BlackRock, will touch upon potential market headwinds ahead and outline new opportunities to enhance an advisory business.

As more financial advisors seek out ways to gain an edge in the evolving investment landscape, ETF managed portfolios have been quickly garnering assets. According to Morningstar, there were 667 such strategies from 145 firms with $102 billion in assets under management as of June 2014, with existing managers still expanding on their current product offerings. Like the ETF business at large, the manage portfolios landscape is dominated by three players – F-Squared Investments, Good Harbor Financial and Charles Schwab’s (SCHW) Windhaven Investment Management.

Different investors have varying investment horizons and life goals. In an attempt to provide greater customized services, these ETF managed portfolio offerings help advisors track more personalized strategies to aid clients reach their target goal through institutional-caliber portfolios that provide better transparency than most fund portfolios, along with the efficiency of ETFs that most have come to know.

For instance, financial advisors can access alternative allocation methodologies to enhance a traditional stock and bond portfolio. With 5-year bull, threat of rising rates, any further corrections on the horizon and currency risks, ETF strategists can provide a unique advantage for advisors and help avoid headwinds.

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.

At the upcoming Virtual Summit conference, advisors will be able to listen in on fixed-income ETF strategies for a rising rate environment, along with U.S. and global ETF equity strategies. The ETF Strategists will help listeners prepare for a rising rate environment and the effects of a stronger U.S. dollar. Additionally, the Strategists will also provide some investment ideas to manage portfolio risk and capture opportunities in a changing U.S. and global market.

Financial advisors who are interested in learning more about ETF managed portfolios can register for the upcoming ETF Strategist Virtual Summit on November 18, 2014.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.