Talkin' Shop: Using ETFs for Strategic Equity Exposure

In an all-weather investment approach, strategic long equity exposure makes up an important portion of the portfolio. Standpoint believes that expanding the opportunity set with globally diversified equity exposure is a pre-requisite for a true multi-asset all-weather strategy. But how does an investor get exposure to global equities? Eric, CIO of Standpoint, discusses some of the options he considered when designing a multi-asset strategy.

Key Takeways

  • For long term strategic exposure, common stocks and ETFs are more tax efficient than equity futures contracts.
  • It is difficult and expensive to manage a portfolio of thousands of individual company stocks that are traded on foreign exchanges. Asset managers like Vanguard and BlackRock do an incredible job of delivering global equity exposure in an inexpensive vehicle.
  • For long global equity exposure, using ETFs with an appropriate management fee is optimal for both tax efficiency and maintaining low expenses.

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