Insights

As the financial landscape in Australia continues to evolve, investors and financial advisers are increasingly seeking innovative solutions to optimise portfolio performance and help their clients achieve their long-term financial goals. One such solution gaining traction is investment in ETF managed account portfolios. This approach offers significant advantages over individual ETF fund managers or a suite of managers, providing a streamlined, cost-effective, and adaptable investment strategy. In this blog, we’ll explore the key benefits of selecting an ETF managed account portfolio and why it stands out as a cost-efficient choice for financial advisers and their clients. 

1. Streamlined portfolio management 

One of the primary benefits of an ETF managed account portfolio is the streamlined management process. Unlike a suite of managers, where coordination and communication can become complex, an ETF managed account is managed by a single team of experts. This unified approach ensures a comprehensive but centralised investment strategy, reducing the administrative burden on financial advisers and allowing for more efficient portfolio adjustments in response to market changes. This also gives you a single source of truth and a single point of contact with your managed account provider. 

2. Actively managed asset allocation at a low cost  

Cost efficiency is an important consideration for both financial advisers and their clients. Our portfolios are constructed using ETFs which are inherently low-cost investment options. Where the real value lies is in the annual Strategic Asset Allocation (SAA) review where we ensure we are building the most efficient portfolios by revisiting the long term return and risk assumptions for more than 20 sub asset classes, and in the shorter term Dynamic Asset Allocation (DAA)process where we tilt the portfolio away from the SAA weights based on valuations,  policy and the cycle. These elements offer clients expert management and strategic oversight that they wouldn't receive if managing the portfolio on their own, ultimately enhancing potential returns and optimising investment outcomes. 

3. Enhanced diversification 

Market conditions can change rapidly, and the ability to adapt quickly is essential for maintaining portfolio performance. An ETF managed account portfolio is designed to be responsive to market shifts, allowing for timely adjustments to asset allocations. This flexibility is often lacking when managing multiple individual ETF fund managers, where decision-making can be delayed due to the need for layers of coordination. The dynamic nature of these managed accounts ensures that portfolios are continuously optimised to capture opportunities and mitigate risks. 

5. Simplified reporting & transparency 

Finally, financial advisers and their clients also benefit from simplified reporting and enhanced transparency. Instead of navigating through multiple reports from different managers, a consolidated report provides a clear overview of the entire portfolio's performance, asset allocation, and transaction history. This transparency not only builds confidence in the investment strategy but also facilitates better-informed decision-making. 

Conclusion 

For advisers, ETF managed account portfolios are a compelling solution that combines cost efficiency, enhanced diversification and simplified management. By choosing this approach, advisers can provide their clients with a robust and transparent investment strategy that’s well-equipped to navigate the complexities of modern financial markets. 

At Zenith, our ETF managed account portfolios incorporate an additional layer of strategy, employing a proprietary dynamic asset allocation (DAA) overlay to maximise market opportunities as they arise. We believe this ultimately leads to greater opportunities to add value to portfolios and better outcomes for your clients.