Better Management of Your Entire Portfolio

There are many aspects of managing a portfolio, and the new alternatives can help investors do a better overall job. Let's assume you own a portfolio of securities and mutual funds, or perhaps you only own mutual funds. Regardless, you can gain some valuable new tools and strategies that you probably did not have before.

What if margin trading and short selling are important to you? You can't use these techniques in general with mutual funds, but you can purchase ETFs on margin, and they can be sold short. Any type of order that applies to common stocks also applies to ETFs ”for example, limit and stop orders, good-to-cancelled orders, and so forth.

Investors can enter and exit the market intraday with ETFs. With mutual funds, investors can only transact at the end of the day. For an investor who wants the flexibility of being able to exit the market quickly, this can be important.

Folios also help an investor better manage the portfolio. An investor can change a folio anytime by adding or deleting stocks, or changing the amount invested in one or more stocks. Flexibility is one of the key characteristics of folios.

One of the benefits of the managed account is the closer integration of the account with the client's overall investment approach. For example, if you own a significant number of shares of your employer's company, the managed account can be structured to avoid this company. With a mutual fund, you might be buying an additional position in the company.