Tactical ETF Strategies Have Transformed Investing | ETF Trends

Diversification has become an accepted, foundational principle for constructing investment portfolios. In many cases, discussion around diversification centers on incorporating multiple asset classes into an investment portfolio in order to enhance the overall risk/return profile.

In our view, strategy diversification is an additional, important investment tool for constructing portfolios. Investors of all sizes are recognizing the value of combining strategic allocations with tactical management. Some within the financial industry mistakenly suggest it is an “either-or” investment world. That is, investors must either choose passive, strategic allocations or they must choose active, tactical allocations. This is a false choice.  Asset class and strategy diversification allows us to build portfolios in an “and” investment world, where we can embrace both strategic and tactical allocations.  Strategic (often passive) allocations derive return by accepting market risk. Tactical portfolios derive return by accepting strategy or active risk...