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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.

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

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