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  • Home>ETF Managed Portfolios>ETF Managed Portfolios>Performance Reporting - What’s Behind the Numbers?

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    Performance Reporting - What’s Behind the Numbers?

    Not all strategies are made the same.

    Ling-Wei Hew, 05/26/2015

    We have made several changes to the Morningstar ETF Managed Portfolios database to better align our data set with our vision of best-practice standards pertaining to the reporting of exchange-traded fund managed portfolios’ returns. To start, we have added numerical identifiers to distinguish between the various types of reported returns to the Landscape report. While ETF managed portfolios first emerged within the domain of traditional separate accounts, the use of ETFs has fostered new forms of collaboration among asset management firms, UMA platforms, and mutual fund companies. Because of the relatively small number of holdings and quantitatively driven investment processes utilized by many strategies, a significant portion of assets have grown via means of model delivery through multiple nondiscretionary sources—namely platforms such as Envestnet and AssetMark, or even other third-party Registered Investment Advisors. In addition, to add another layer of due diligence and validity, we have also added the source of any reported nondiscretionary returns. Given the dispersion of returns between discretionary and nondiscretionary accounts caused by differences in portfolio implementation and construction, knowing the source of reported returns will help investors to ask the right questions when parsing performance disclosures as they conduct due diligence

    Click here to view the Return Type Identifiers and access the full article.

    1

    Ling-Wei Hew is an analyst on the passive funds research team for Morningstar. In this role, she is responsible for researching and providing commentary on ETF managed portfolios.

    Hew holds a bachelor’s degree in economics from Wellesley College. She also holds the Chartered Financial Analyst® designation.