Reporting from Devon Layne, IndexUniverse
ETF model portfolio firms are gaining in popularity as FT Capital, Aquiline Capital Partners and other firms seek to enter the space by investing in such firms that specialize in ETF asset allocation strategies, according to an article on Reuters.
ETF model portfolios, which invest in a selection of ETFs as opposed to individual securities, are attractive to private equity firms, as they can provide exposure to a wide range of index ETFs all while keeping expenses lower and providing greater transparency than traditional mutual funds, the Reuters story said.
BlackRock’s ETF unit, iShares, keeps of a list of model ETF portfolio providers that includes the majority of players in that niche. The iShares Connect Program has more than 200 strategies run by 104 managers, with a total of $46 billion in combined assets, Reuters said. BlackRock expects that number to rise to $120 billion by the end of 2015, the article said.
Model ETF portfolio strategies aren’t without their share of worries. Some in the money management industry are concerned about the lack of resources in place to sell their products, and it can become difficult to track a model ETF firm’s performance, the wire service report said.
For the full story, visit Reuters.com.