Active strategies are all in, especially when it comes down to it new launches in the ETF space. By all accounts, active ETFs are accounted for 70% of launches this year only, and assets in globally active ETFs it recently surpassed $1 trillion.
This is consistent with findings from a new study by WMIQ on behalf of Envestnet, orActive and Passive Investing in Portfolio Construction: What Advisors Are Doing Nowwhich found that advisors are using a healthy mix of passive and active strategies when building client portfolios.
Indexed ETFs (85%) topped the list of most used products among respondents, followed by individual securities (80%) and then some active ETF and mutual fund strategies.
In addition, respondents expressed a preference for active management of taxable fixed income (39%), followed by US stocks (39%) and international stocks (37%). Overall, just over a third of respondents said they prefer a balance of active and passive management.
In terms of portfolios that mix active and passive investments, 29% use passive funds for core positions and active funds for opportunistic allocations, while 28% use a combination of active funds, passive funds and individual securities. In addition, 12% use active funds for core positions and passive funds for strategic allocations, while 7% use a combination of active funds and individual securities, 6% use passive funds for all allocations, 5% use a combination of funds liabilities and individual securities. and 3% use individual securities exclusively.
The study also found that 72% of respondents use third-party managed models for at least some of their clients, but this use varied by advisor type. Only 53% of RIAs reported using third-party managed models compared to 87% of hybrids and 78% of IBDs.
The survey was conducted in July by WMIQ. Received 438 completed responses.