All-Channel Trend Report
Part 6: Strategic Role of ETFs

Part 6: Strategic Role of ETFs

Section 4: Best Practices of Top Advisors

While overall ETF usage among advisors is up year-over-year across all firm categories, there are definitely distinctions in the way each group utilizes them to accomplish investment objectives for clients. For instance, the largest firms are more likely to use ETFs for core positions within client portfolios, likely due to the fact that the largest firms have very well-defined asset allocation plans and established investment management strategies. The large firms are also more inclined to use ETFs to gain certain factor or asset class exposure as well as to help position client portfolios for directional market movement. The growing firms ETF usage doesn’t really stand out relative to the other categories, but are more likely than the other firms to use them for factor or asset class exposure. The other firms are slightly more likely to use ETFs for sector bets and are roughly equal to the large firms when it comes to alternative exposure, country/region exposure and thematic investing. In summary, relative to the growing and other firms, the large firms tend to use ETFs more widely, for both broad market exposure and tactical objectives. 

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