There are a number of options available to investors to implement tactical asset allocation, including exchange traded funds (ETFs). The unique structure of an ETF enables investors to buy or sell them at any time throughout the day.
The range of ETFs available to institutions is vast. At the end of December 2018, there were 7,199 exchange traded products (ETPs -which include ETFs and exchange traded notes), available globally3, providing exposure to almost every tactical asset allocation option an institutional investor could want. Beyond the core exposures to major indices, investors can use ETFs to access sectors and sub-sectors, thematics, commodities, fundamental factor tilts and more.
In addition to representing virtually every asset class, ETFs offer efficient vehicles for implementing a tactical idea. The flexibility enabled by ETFs' speed of execution and ease of use make them versatile and effective tools in an expanding list of institutional investors’ portfolio functions.
As a result, ETFs are becoming an increasingly popular means of taking on both tactical and strategic exposures needed for portfolio construction and adjustment.