Question 1

What is an asset allocation ETF?

Accepted Answer

An asset allocation ETF makes it easier for common investors to achieve their financial goals by investing through a single fund that matches their risk and return profile. This structure provides investors broad-based options to invest in stocks and bonds in various geographic locations without the need for constant rebalancing and monitoring. By consolidating different assets into one fund, this approach makes asset allocation simple and cost-efficient for investors who want to develop a global, diversified portfolio.

Question 2

What is an all-in-one ETF?

Accepted Answer

An all-in-one ETF is a single fund which offers investors an avenue to build a diversified global portfolio through a mix of bonds and stocks without the need for buying individual ETFs. All-in-one ETFs, also known as asset allocation ETFs, make investing simple and more efficient for common investors to achieve their financial goals. In addition to their simple structure, all-in-one ETFs are designed for automatic rebalancing to keep portfolios on track to achieve their performance target.

Question 3

What is strategic asset allocation vs tactical asset allocation?

Accepted Answer

In strategic asset allocation, investment managers establish a mix of equities, fixed income and cash that is best suited to investors’ risk tolerance and financial objectives. They maintain this mix regardless of short-term market conditions. This strategy focuses on a well-diversified portfolio using a variety of assets in global markets. If investors’ objectives change over time, managers can rebalance the asset mix. In tactical asset allocation, managers build a diversified portfolio of equity and fixed income with the flexibility to change the asset mix in the short run to take advantage of market conditions and manage risks. This approach focuses on an active asset management strategy to make timely adjustments in the asset mix to achieve financial goals.

Question 4

What type of assets make up an asset allocation fund?

Accepted Answer

An asset allocation fund generally invests in equities, bonds, cash or cash equivalents to offer investors a diversified portfolio through a single investment product. By investing in a well-diversified assets and global jurisdictions, the fund tries to achieve pre-determined investment objectives that align with investors’ risk/reward profile.

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