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Laxman Pai, Opalesque Asia: As choppy markets reflecting both optimism and uncertainty about an unfolding recovery, financial advisors are relying heavily on actively managed strategies to navigate the road ahead, said a study.
According to a PGIM Investments survey of more than 500 financial advisors, advisors allocate a substantial percentage of client assets to active management (62%), while also leaving room for passive strategies (34%).
The survey also found that they anticipate this allocation will remain largely the same over the next three years.
As expected, advisors use a mix of asset classes across client portfolios, including U.S., international, and emerging market equities; fixed income, and alternative strategies. In the next three years, advisors anticipate increasing equity allocations in international/global and emerging markets.
Given the pandemic's devastating impact on global economies and markets, it's not surprising that most advisors (76%) say COVID-19 is influencing how they construct client portfolios in 2021. Approximately two-thirds (68%) indicate stock market volatility is their top portfolio management concern.
While nearly all financial advisors (98%) currently use and will likely continue to use mutual funds, over the next three years 65% anticipate using more exchange-traded funds (ETFs) and 41% anticipate greater use of separately managed accounts.
Within fixed income, advisors see high-yield bonds, investment-grade corpo...................... To view our full article Click here
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