NEPC’s Will Forde shares his perspective in this Chief Investment Officer article on the growing role of ETFs in institutional portfolios. Read the full article on CIO’s website for insights from industry leaders.
As exchange-traded funds continue to become a bigger part of the investing landscape, institutional investors are using the vehicles more broadly.
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“Will Forde, head of marketable equities at NEPC, agrees that ETFs offer niche exposure and tactical opportunities in a way that is hard to replicate with other vehicles.”
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“ETFs can be easier operationally and cheaper to use than traditional index funds for NEPC’s smaller institutional clients, Forde says, since these smaller investors do not have the size and scale to negotiate favorable pricing.
Forde says his clients will use ETFs if they need to quickly implement tactical exposure, such as hedges. He also reports seeing them used for portfolio completion, such as if a client has a structural bias, like a country underweight. For taxable clients, ETFs are useful in tax-loss harvesting.”
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“Forde sees use cases for ETFs evolving as asset owners continue to get comfortable with the vehicle.
‘People get really creative with how to use things that even five or 10 years ago seemed pretty basic, but now they’re using them in different ways,’ he says.”
Click here to read the full article on the Chief Investment Officer site.