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ETF Specialist

Multiasset ETFs: A Diversified Approach to Income

Higher income through a mix of equity, bond, REIT, and MLP holdings.

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Investors' quest for income has been a well-documented trend over the past few months. Year to date through April, the top Morningstar categories for open-end fund flows have been intermediate bond and high-yield bond, and more recently, there have been relatively strong flows into allocation funds. Fund flows into exchange-traded funds have followed a similar pattern, with strong flows into bonds (long, intermediate, and high yield) and to a lesser degree, large value, which includes many dividend-oriented funds.

Allocation ETFs are still small in number and have not attracted much investor attention. But over the past two months, three allocation, multiasset income-focused funds have launched. These ETFs, as one-stop funds for diversified income exposure, seek to address investors' need for higher and potentially more stable income.

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Patricia Oey does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.