As market volatility roils the equities and bond markets alike, getting alternative asset exposure is imperative, and exchange traded funds (ETFs) are ideal for accomplishing just that.
Increasingly, institutional investors are using ETFs to obtain multi-asset exposure, according to an Institutional Investor survey. The study includes 766 institutional investment decision makers and asset allocators.
“The proliferation of ETF usage by institutional investors globally has widened with more frequent inclusion in multi-asset strategies,” Institutional Investor notes.
“Multi-asset managers – which, by definition, invest across asset classes in an effort to achieve particular outcomes such as growth, income, or risk mitigation – see ETFs as especially useful for their transparency (58%), trading flexibility (55%), liquidity (54%), and transaction cost efficiency (53%) according to 362 asset managers and hedge funds participating in a global survey conducted by Institutional Investor (“Managing Market Volatility in 2021”),” Institutional Investor adds.
3 Options From Invesco
From getting a balanced portfolio of multiple assets to more growth-oriented exposure, Invesco has three ETFs to suit an investor’s needs:
- Invesco Balanced Multi-Asset Allocation ETF (PSMB ): PSMB seeks to achieve its investment objective by allocating its assets using a balanced investment style that seeks to maximize the benefits of diversification, which focuses on investing a portion of fund assets both in underlying ETFs that invest in fixed income securities as well as in underlying ETFs that invest primarily in equity securities. The fund’s target allocation is to invest approximately 45%-75% of its total assets in equity ETFs and approximately 25%-55% of its total assets in fixed income ETFs.
- Invesco Conservative Multi-Asset Allocation ETF (PSMC ): PSMC seeks total return consistent with a lower level of risk relative to the broad stock market. The fund seeks to achieve its investment objective by allocating its assets using a conservative investment style that seeks to maximize diversification benefits, which focuses on investing a greater portion of fund assets in fixed income ETFs and provides some exposure to underlying ETFs that invest primarily in equity ETFs. Specifically, the fund’s target allocation is to invest approximately 5%-35% of its total assets in equity ETFs and approximately 65%-95% of its total assets in fixed income ETFs.
- Invesco Growth Multi-Asset Allocation ETF (PSMG ): PSMG seeks long-term capital appreciation by allocating through a growth investment style that seeks to maximize diversification potential. In essence, PSMG is a “fund of funds,” meaning that it invests its assets in the shares of other ETFs instead of securities of individual companies.
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