Are you using ETFs more -- if so, why?
I'm working on a piece for Professional Adviser about whether adviser attitudes to ETFs are changing.
- Are you using ETFs more for clients?
- If yes, why?
- If no, why?
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ETFs are increasingly useful as tools for expressing investment views rather than simply accessing cheap beta. Our portfolios are asset allocation led and globally diversified, and ETFs help us implement targeted decisions precisely and at low cost.
Index concentration is a good example. With a handful of tech mega caps dominating the S&P 500, an equal weight S&P 500 ETF provides broad US equity exposure without overexposure to the largest stocks. In addition, sector ETFs allow us to increase exposure to areas such as defensives, where valuations currently look attractive.
One growth area is active ETFs, combining the flexibility, liquidity and transparency of the ETF wrapper with active security selection. Increasingly, the debate isn't active versus passive, but choosing the best structure for the exposure we're seeking.
Index concentration is a good example. With a handful of tech mega caps dominating the S&P 500, an equal weight S&P 500 ETF provides broad US equity exposure without overexposure to the largest stocks. In addition, sector ETFs allow us to increase exposure to areas such as defensives, where valuations currently look attractive.
One growth area is active ETFs, combining the flexibility, liquidity and transparency of the ETF wrapper with active security selection. Increasingly, the debate isn't active versus passive, but choosing the best structure for the exposure we're seeking.