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Model Portfolio Education

Due diligence: 8 Factors to Consider When Selecting an ETF Model Portfolio

  • With the growing number of model portfolios available, specifically those implemented with a managed account, model selection has become a more complex task.
  • A comprehensive due diligence framework may serve as a guide when distinguishing one provider from another.

ETF model portfolios each have unique characteristics and finding the right strategy can be a challenging task. When using models and managed accounts, remember that you are not just buying an investment solution - you are also selecting a provider to partner with over the long term. As a result, you may want to employ some best practices when conducting due diligence on investment providers.

State Street Global Advisors partnered with Greenwich Associates to conduct a study to better understand what investors are looking for in their model portfolio strategies and providers. From this research, we developed a comprehensive due diligence framework that may help you differentiate between model providers and select the best partner to help you achieve your specific goals.

The eight factors are:

Source: State Street Global Advisors in partnership with Greenwich Associates, ETF Model Portfolios: The Due Diligence Factor, 2018.

Choosing an ETF Model Portfolios Provider

ETF model portfolios can be complex and have unique characteristics; it’s important to take into account all the value-add factors that result from this. Users of these strategies should remember they are not just buying a portfolio—they are also selecting a partner to support you and the portfolio over the long term. As a result, buyers of these products should rely on established best practices when implementing due diligence procedures for ETF model portfolios.

We are here to help support you throughout any stage of your due diligence process. Contact the State Street ETF Model Portfolio Team to understand how we can help.