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By Andrew Gogerty | 09-11-2012 01:00 PM

ETF Strategy Growth a Boon for Advisors

The growth in ETF managed portfolios has created numerous choices and complementary strategies for advisors to better serve their clients, says RiverFront's Peter Quinn.

Andrew Gogerty: Assets continue to flood into ETF managed portfolios. Hi. I am Andrew Gogerty, ETF managed portfolio strategist at Morningstar. Today, joining me for a short conversation on trends in this space is Peter Quinn, president of the RiverFront Investment Group.

Peter, thanks for joining me today.

Peter Quinn: Thanks for having me, Andy.

Gogerty: So, we recently put out our updated Landscape Report, and there were some staggering numbers: 30% growth this year in this space, 48% in the last nine months. As one of the firms that's directly in front of financial advisors, what type of strategies or combination of attributes are most in demand right now that you're seeing?

Quinn: Well, it's been great growth in the space. I think any time you have something like ETFs that are growing so quickly, having people like RiverFront, some of the other strategists in the marketplace, putting them together in a package that makes sense is something I think that we'll see obviously continued growth in. And the fact that you're now following at Morningstar I think is great for all us as ETF strategists. I really think we're seeing demand for a combination of strategies. So, there is a wide dispersion between different types of ETF strategists.

Gogerty: Absolutely.

Quinn: At the essence we are really a core manager where we're trying to build a comprehensive core, multiple asset classes that are risk-based models out in the marketplace. And we're obviously seeing a lot of demand for that. We've been a beneficiary of that growth. But there are some ETF strategists that are seeing great demand coming in that are doing more satellite strategies, where there are doing more aggressive tactical bets. They are using quantitative models to structure those portfolios.

And so I think one of the nice things about the industry and its growth is that you now have choices in the ETF strategy space about how to best execute what you're trying to do for your client.

Gogerty: So, even though your portfolio is really a solution in that you're holding multiple ETFs, financial advisors are still looking at you as kind of a strategy, and they still want to diversify strategies within a client portfolio even though each strategy may have multiple positions?

Quinn: Absolutely. I mean we're big believers that solutions for clients are about partnerships; they are not about product. And while we provide what we think is a terrific comprehensive core solution for people where we are using these multiple asset classes and tactically adjusting those, there are other strategies that complement RiverFront very well, whether it's another ETF strategist, whether it's an active mutual fund, whether it's another separate account manager, or an individual ETF, that can really complement what we're doing, and we're seeing more and more of that in the marketplace.

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