Financial advisors in a recent survey think now is the right time to allocate more assets to active managers, given low interest rates and low return expectations.
AB, formerly AllianceBernstein, conducted a brief poll of some 200 advisors during the annual Schwab Impact Conference from Nov. 10-13.
Seventy-two percent of advisors surveyed reported that they currently used exchange-traded funds in client portfolios, but 68% said market conditions now favor an active approach to asset management.
The poll found that advisors were particularly concerned about the safety of high-yield ETFs.
Sixty-five percent of respondents said they either did not use high-yield ETFs or planned to decrease their exposure to these funds in the coming year.
Gershon Distenfeld, director of high yield at AB, said in a statement that financial advisors were fast becoming aware that in the search for high yield in the long term, passive ETFs were a bad investment.
“The math speaks for itself,” Distenfeld said. “Over the first nine months of the year, the two largest ETFs have sharply underperformed the average active manager, not to mention their own benchmarks.