McCarthy is to lead the firm’s revamped key account
management function, overseeing a team of account executives throughout the
U.S. The division’s strategic account plan fostees relationships through
alignment of customer needs, collaboration and communications, as well as
performance measurement.
McCarthy has more than 14 years of experience and recently
served as retirement plan services consultant for Gilliam Coble & Moser
LLP. There, she focused on managing ongoing operations, bolstering
relationships with third-party service providers and assessing process
efficiencies.
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Across all institutions participating in the study, 58%
describe their use of ETFs as generally strategic or long-term in nature, a
slight increase from 57% in 2012. In general, Greenwich Associates defines a
strategic investment as any asset held for a year or more.
ETFs have proven to be especially effective tools for tactical
portfolio management (for example, adding liquidity through an ETF overlay), and
ETFs continue to be used widely in this manner. Seventy percent of
institutional ETF users employ the funds for tactical portfolio adjustments, up
sharply from 48% in 2012.
“These results clearly demonstrate that the role of ETFs within
institutional portfolios is changing,” says Andrew McCollum, Greenwich
Associates consultant.
In addition to using ETFs both tactically and strategically, two other
trends emerged: the use of these funds at the core of portfolios and an increase
in fixed-income ETFs. “More and more investors are using ETFs as the core of
their portfolios, and for a longer time,” Daniel Gamba, head of iShares Americas
Institutional Business at BlackRock, said during a press event about the survey
results.
Using ETFs at the core of
portfolios
Institutional investors’ need for passive exposures as part of
core/satellite portfolio models has become a key driver of ETF demand; the most
common application for ETFs by institutions is within the core of their
portfolios.
Greenwich Associates found that 72% of insurance company users and 67%
of pensions, foundations and endowments that use ETFs employ these products to
obtain passive exposures in the “core” component of their portfolios. Approximately
80% of registered investment advisers (RIAs) that buy ETFs use them for
passive “core” exposures,
and 90% of
investment consultants who
advise their clients to make use
of ETFs recommend using these products for passive exposure to complete core/satellite
portfolio structures.
“Institutional investors are attracted to the wide variety of exposures
combined with the exchange-traded liquidity and
transparency that ETFs
provide,” said Sue Thompson,
BlackRock’s head of RIA and institutional asset management channels.
“As a result, investors recognize ETFs can play an important role in the core of their portfolios.”
Greater use of fixed income
While nearly 90% of institutions use exchange-traded funds for domestic equities exposure
and 74% use
them for international
equity portfolios, the funds are also gaining traction in fixed income. Fifty-five percent of
institutions invest in domestic fixed-income ETFs. Usage of domestic fixed
income is most common among insurance companies at 78%, and 74% of RIAs also
employ ETFs in domestic fixed income.
Fixed-income ETFs are increasingly being used by investors to access liquidity
and implement investment
strategies, said Matthew Tucker, head of iShares fixed income investment strategy at
BlackRock.
According to the study, institutions view liquidity/trading volume as
their top priority when selecting or recommending a specific ETF—76% include
liquidity/trading volume among the three most important criteria used in
picking an ETF.
The Greenwich Associates study, sponsored by BlackRock, interviewed 179
institutional investors that currently use ETFs.