BlackRock Inc.'s iShares predicts that by 2015 investment strategists will be helping advisors construct exchange-traded fund portfolios worth a total of $120 billion.
"ETF investment strategists" will provide financial
advisors looking for outsourced model
portfolios with expertise and knowledge of ETF portfolio construction and
trading, according to a report released by iShares today.
Sue Thompson, head of iShares Registered Investment Advisor/Asset Management Group, says more advisors and managers are using ETF investment strategists in their practice at virtually every stage in the investment process, from building complete asset allocation models to executing tactical strategies.
"More and more, we're seeing advisors striking partnerships with ETF investment strategists," says Thompson, "and as a result, successfully offering to their clients institutional quality portfolios and product innovation that once were too expensive and impractical for retail investors to own."
This shift toward specialized ETF investment management represents a major change for the ETF market, says Thompson. "Advisors have increasingly recognized that ETF investment strategists can help decrease time spent on portfolio issues that frees them up to build client relationships.
"And it benefits the ETF investment specialists because in many cases these are quantitative managers or fundamental managers that have really keen insight, but they don't want to deal with thousands of clients; they really want to devote themselves to the investment side of the equation," she noted.
iShares has monitored this specialized manager class of investment strategists via its iShares Connect Program. Starting in 2008 it produced its first Guide to ETF Investment Managers that listed 25 managers with $5.8 billion in assets under management. Today, iShares is tracking more than 200 ETF strategies from more than 100 managers representing $46 billion in assets, an almost 800 percent increase in market size.
The iShares' study is based upon interviews conducted with 130 randomly selected firms from March 27 to April 20. Among the firms interviewed, AUM ranged from less than $50 million to greater than $5 billion.
BlackRock is the world's largest asset manager, with $3.7 trillion assets under management. iShares offers more than 500 ETFs on 20 exchanges worldwide.