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Investing Specialists

ETF Model Bucket Portfolios Get Fixed-Income Switch

We're using an active fund in our ETF portfolios. What gives?

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One of the benefits of owning a portfolio that's composed of exchange-traded funds is that you shouldn't have to make significant changes, if any, especially if you've populated your portfolio with broad, low-cost index trackers. The ability to be hands-off is a key virtue for busy investors of all ages, but especially for retirees

I aim to take a similarly hands-off approach with my model portfolios. My assumption is that investors will do their own rebalancing to stay in sync with their asset-allocation frameworks. Thus, I'll make changes only if one of the holdings has experienced a substantive change. In the case of ETFs, that would be an expense-ratio change or a strategy shift that affects the underlying portfolio and how the fund fits into the portfolio overall.

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