Fund-data publisher's subsidiary offer all-index core, satellite strategies. Morningstar Investment Services has launched a managed account service with five actively managed portfolios that use ETFs to meet a range of investor needs.

"ETFs offer investors exposure to specific segments of the capital markets in a diversified, low cost, and tax efficient manner similar to index funds," says William Harding, Morningstar Investment Services' head of research. "Our new Managed ETF Portfolios combine these positive attributes of ETFs with our objective research, analysis, and portfolio management expertise in actively managing these portfolios to ensure they are well positioned given their risk and return objectives."

Core, satellite

For its Managed ETF Portfolios, Morningstar Investment Services uses the standard outsourcer's pitch: taking advantage of the product gives users -- advisors in this case -- more time for client service and business development.

Independent broker-dealers Ameritas Investment and Centaurus Financial have already started offering Morningstar Managed ETF Portfolios to their affiliated brokers. Lincoln, Neb.-based Ameritas has about 600 reps; Orange, Calif.-based Centaurus has about 500. These firms also offer Morningstar's Managed Mutual Fund Portfolios and Managed Portfolios Select Stock Baskets.

The ETF Portfolios use a "core and explore" investment strategy that combines exposure to broad asset classes with positions that add value by capitalizing on market opportunities. Morningstar Investment Services picks its "explore" positions through its proprietary ETF-evaluation system, which combines macroeconomic and fundamental factors.

Morningstar Investment Services has more than $2 billion in assets under management. It's a subsidiary of Chicago-based research firm Morningstar. -FWR

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