ETF managed portfolios are primarily separate account strategies that have more than 50% of a portfolio’s assets in ETFs, according to Morningstar. Of the more than 330 ETF managed portfolios with about $22 billion in assets currently tracked by Morningstar, approximately 30% were launched within the past three years and the number continues to increase.
“ETF managed portfolios are a burgeoning area. By expanding the research available for ETF managed portfolios, we aim to increase the awareness and transparency of this rapidly growing area of the industry,” said Andrew Gogerty, ETF managed portfolios strategist for Morningstar. “These strategies typically offer greater tactical flexibility than a traditional individual security separate account strategy, but no other firm is providing commentary, research, and education for advisors in this area. Our goal is to develop a suite of analytics and commentary that will help advisors and other investors who are sifting through these investment options.”
Morningstar is also creating a proprietary classification system for ETF managed portfolios, which advisers can use to screen offerings based on the portfolio’s strategy attributes to make meaningful comparisons. More information about the classification system is available at http://global.morningstar.com/ETFManagedPortfoliosClassification. More information about our rankings and research for ETF managed portfolios is available at http://global.morningstar.com/ETFManagedPortfoliosFactSheet.
Morningstar will rank ETF managed portfolios by performance against their peers within their classification grouping. The classifications for ETF managed portfolios differ from the Morningstar Category Classifications, which are applied to mutual funds, variable annuities, and separate accounts based on the underlying securities in each portfolio.
Morningstar plans to make the ETF managed portfolios rankings and research available through its adviser and institutional products, including Morningstar Advisor Workstation, Morningstar Office, and Morningstar Direct. Selected content from the ETF managed portfolios database will also be available on Morningstar.com in early 2012.