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Investing Specialists

ETF Model Bucket Portfolios Get Fixed-Income Switch

We're using an active fund in our ETF portfolios. What gives?

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One of the benefits of owning a portfolio that's composed of exchange-traded funds is that you shouldn't have to make significant changes, if any, especially if you've populated your portfolio with broad, low-cost index trackers. The ability to be hands-off is a key virtue for busy investors of all ages, but especially for retirees

I aim to take a similarly hands-off approach with my model portfolios. My assumption is that investors will do their own rebalancing to stay in sync with their asset-allocation frameworks. Thus, I'll make changes only if one of the holdings has experienced a substantive change. In the case of ETFs, that would be an expense-ratio change or a strategy shift that affects the underlying portfolio and how the fund fits into the portfolio overall.

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Christine Benz does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.