Customized managed portfolio strategies involving low-cost exchange traded funds (ETFs) are continuing to attract advisors and investors in 2014. A recent report from Morningstar revealed that ETF-managed portfolios saw a 40% increase in assets last year, reaching $96 billion. Other strategies with more than half of their assets in ETFs had similar results.
ETFtrends.com explains that these strategies enable ETF strategists to create unique tactical short-term and strategic long-term portfolios in a remarkably dynamic market. For example, the Financial Times recently reported that the largest ETF portfolio manager F Squared “has broken away from conventional benchmark investments, switching over to strategies that protect against falling markets.”
Morningstar’s report went on to identify the best performing strategy as the AthenaInvest global tactical ETFs portfolio managed by Thomas Howard. A former professor of finance at the University of Denver, Howard’s extensive research has “led to an investment strategy that seeks to take advantage of the ‘emotional crowds’ that drive equity prices.”
According to Howard, the current environment is ideal for equities, and may be the best seen in more than half a decade. He added that concerns about the outlook for the U.S. stock market are groundless.