This post was written with contributions from Bartlomiej Szczurek, who is a Research Analyst on the SPDR Portfolio Insights and Research Analytics Team.
As clients want to fully understand the true nature of their portfolio exposures, the demand for our Portfolio Insight analysis remains steady. This service provided by SPDR ETFs offers our clients an in-depth view into their portfolios, as we analyze exposures and identify inadvertent risks in such areas as asset class, security type, sector, and duration buckets.
This service not only provides our clients with valuable insights into their portfolio allocations, but also it enables our team to draw conclusions on market trends coming from hundreds of aggregated portfolios. Our findings and observations from:
- Pre-COVID-19 — Mid-2019 to end of Quarter 1 2020 and
- Post-COVID-19 — April and May 2020
are summarized in this article. We examine the active weights of a portfolio versus the clients’ strategic benchmark and break down each sub-asset class. Our team also analyzes asset allocation positioning in pre-COVID-19 and post-COVID-19 periods.
Exchange traded funds defend the pole position
Exchange Traded Funds (ETFs) remain the most utilized investment vehicle in our clients’ portfolios, irrespective of business cycle and market condition. Throughout the pre-COVID-19 time period, the average ETF allocation within our clients’ portfolios was 64.41%, which has increased to 69.55% since the beginning of the pandemic. The analysis implies that the second-most often used vehicles were Open-End mutual funds, which made up 28.82% and 23.16% of average allocations, respectively. Almost 70% of ETF allocations were within equities, while mutual funds were used most often to acquire Fixed Income exposure, with an average allocation of 47.33%.