NEW YORK (December 11, 2023) – ISS Market Intelligence, a leading global provider of data, analytics, insights, media, and events solutions to the global financial services industry and part of the ISS STOXX GmbH group of companies, today announced the release of its latest report, Evolving Portfolio Construction and Active ETF Decision Framework.
The report provides a comprehensive overview of product strategy and development challenges in the asset management industry, with a particular focus on the opportunities and risks of launching products in the active ETF product category. The study places product strategy in the broader context of the evolution in advisor approaches to crafting investor portfolios. It includes a detailed analysis of product development, prioritization for asset managers, the dynamic advisor portfolio landscape, and a decision framework for those entering or expanding in the active ETF product segment.
Drawing upon findings from a recent ISS MI survey of financial advisors and harnessing data and expertise from across ISS MI research platforms, the report highlights key dynamics asset managers face as they navigate a crowded, increasingly multi-vehicle and multi-strategy product landscape.
Notably, the report tracks a significant shift in sentiment as advisors increasingly favor ETFs, making it the new battlefield for active managers. Asked in a September survey how they would invest client assets if a favored manager is available across vehicle types, 57 percent preferred ETFs over open-end mutual funds and separately managed accounts—a material increase from the 49 percent recorded two years earlier.
“Product excellence is a necessary but insufficient ingredient for success in the active ETF arena. The right packaging, sales, and distribution strategies are essential. Getting those right is impossible without understanding the role advisors see them playing in their client portfolios,” said Christopher Davis, Head of U.S. Fund Research for ISS Market Intelligence. “This report marries deep understanding of the asset management business with our insights into advisor behavior to outline potential paths to success in the active ETF space.”
Learn more about the Evolving Portfolio Construction and Active ETF Decision Framework report here.
About ISS Market Intelligence
ISS Market Intelligence (ISS MI) is a leading provider of data, insights, and market engagement solutions to the global financial services industry. ISS MI empowers asset and wealth management firms, insurance companies, distributors, service providers, and technology firms to assess their target markets, identify and analyze the best opportunities within those markets, and execute on comprehensive go-to-market initiatives to grow their business. Clients benefit from our increasingly connected global platform that leverages a combination of proprietary data, powerful analytics, timely and relevant insights, in-depth research, as well as an extensive suite of industry-leading media brands that deliver unmatched market connectivity through news and editorial content, events, training, ratings, and awards.
About ISS STOXX
ISS STOXX GmbH, through its group companies, is a leading provider of comprehensive and data-centric research and technology solutions that help capital market participants identify investment opportunities, detect qualitative and quantitative portfolio company risks, and meet evolving regulatory requirements. With roots dating back to 1985, we today deliver world-class benchmark and custom indices across asset classes and geographies and serve as a premier source of independent corporate governance, sustainability, cyber risk, and fund intelligence research, data, and related offerings. Our products and services give clients the scale and leverage they need to grow their business more effectively and efficiently. ISS STOXX, which is majority owned by Deutsche Börse Group, is comprised of more than 3,400 professionals operating across 33 global locations in 19 countries. Its approximately 6,400 clients include many of the world’s leading institutional investors who turn to ISS STOXX for its objective and varied offerings, as well as companies focused on ESG, cyber, and governance risk mitigation as a shareholder value enhancing measure. Clients rely on ISS STOXX’s expertise to help them make informed decisions to benefit their stakeholders.