Plan of action: Deploying ETFs

Exchange-traded funds (ETFs) are an increasingly important feature of investing, particularly since the focus on fund costs has intensified. However, determining how and when ETFs are most effectively and appropriately used is dependent upon the purpose of the investment, the asset class in question, the time horizon of the investment, liquidity considerations and, last but not least, the investor’s needs and expectations. Passively-managed funds are an efficient way in which to execute strategic asset allocation policies. Asset allocation decisions at the broadest level – cash, bonds...