Using ETFs for Tactical Asset Allocation
September 18, 2018 at 08:00 AM EDT
A properly executed ETF portfolio can ensure steady growth and profitability regardless of the market cycle. Capitalizing on tactical market-moving opportunities can mean the difference between average growth and above-trend results. Tactical Asset Allocation (TAA) offers investors the opportunity to outperform virtually any market environment. Under this model, asset managers increase a portfolio’s exposure to asset classes that are believed to be more attractive than others. Rather than picking individual stocks or bonds, TAA focuses on broader asset classes to produce more profitable returns or hedge against instability in the market. The goal of this strategy is to take advantage of market inefficiencies by increasing or decreasing exposure to a particular asset class that may be overpriced or underpriced.