Morningstar’s ETF managed portfolios reports points to reviving AUM growth

Dec 4th, 2015 | By | Category: Alternatives / Multi-Asset

Morningstar, an investment research firm, has published the latest instalment of its ETF managed portfolios landscape report. The report, which covers the third quarter of 2015, tracks 737 strategies from 148 firms, representing a total of over $75bn in assets and finds that global all-asset strategies have consistently been the most popular choice for investors.

Morningstar’s ETF managed portfolio report highlights preference for global all-asset strategies

Money managers using ETF-based portfolios have shown a preference for global strategies that employ a mix of asset classes, according to Morningstar.

ETF managed portfolios are investment strategies that typically have more than 50% of portfolio assets invested in exchange-traded funds. According to Morningstar, these portfolios represent one of the fastest growing areas of the managed-account universe.

Over the short-term, assets have declined owing to market movements and the removal of a large manager, F-squared, from the database following an SEC fine and bankruptcy proceedings. While assets declined 6% over the third quarter, net inflows of an estimated $500m were recorded.

Globally invested all-asset ETF managed portfolios (those with a minimum 20% of assets held outside the US and which invest in a balanced mix of equity and fixed income exposures as well as a minimum of 10% in other asset classes) were the most popular choice. These portfolios accounted for 31.7% of the total surveyed universe.

Global balanced portfolios (those with a 30-70% allocation to equities) and global equity portfolios (those with a minimum 70% equity allocation) were the next most favoured choice, accounting for 18.8% and 17.1% respectively. Globally focused managed accounts accounted for a total 70.1% of all ETF managed portfolios.

ETF Managed portfolios with a strictly US investment mandate accounted for 28.1% of the survey’s results, while those with an international exposure made up just 1.9%. Of the US portfolios, those with equity-based (12.7%) and balanced (10.2%) strategies were the most common.

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