Assets in ETF managed portfolios are one of the fastest growing segments of the managed account market, a report released in September by Morningstar found. Assets have grown 30% in 2012 and 48% since September 2011.
Morningstar is currently tracking almost 490 strategies from 120 firms, up from 370 strategies from 95 firms reported in January. The growth in assets, Morningstar found, is the result of several factors.
First, the fiduciary standard has become the “baseline philosophy” for managing portfolios. Also, growth in the fee-based model has pushed portfolios toward less expensive, broad-based investments. Finally, ETF strategies allow investors to access institutional-type diversification and portfolio management.
In January, Morningstar established a classification system that broke portfolio attributes down into four main categories: Universe, Asset Breadth, Portfolio Implementation and Primary ETF Exposure Type.