The draw of ETFs

Tactical and strategic asset allocation decisions can be enhanced by an ETF and managers across the globe are increasingly being drawn to the liquid, low-cost and transparent vehicles

Fund managers are continually challenged by the need to generate positive returns from their investment portfolios. Increasingly, managers are being drawn to the attractions of ETFs, as part of their tactical asset allocation (TAA) plans, once the strategic asset allocation (SAA) of their portfolios has been set. SAA defines the key proportions of the main asset classes such as cash, fixed income, equities and alternatives (commodities, hedge funds, property, private equity, etc). The interpretation of market sentiment and investment trends also contributes to the investment process, alon...