 Andrea Acimovic, Portfolio Strategist at Elston Consulting, features in ETF Express's latest look at what ETF education means for investment professionals. The article examines how advisers build ETF portfolios and why adding another fund is not the same as adding diversification.
by Henry Cobbe CFA, Founder and Head of Research at Elston Consulting
There are two structural drivers to MPS (Managed Portfolio Services) growth: the shift from advisory models to managed models, and the shift from standard portfolios to custom, advisor-defined portfolios. These trends create greater operational efficiency for advisers whilst retaining their vision, strategy and IP. No wonder this explosive growth is a focus area for the regulator. Firms that are focused on maintaining and improving standards will welcome the FCA's MPS review. Based on some of the questions that have been shared with the press, the topic areas make for interesting reading. 
At the start of the year, the outlook for Bonds looked good. Inflation was declining, there was a prospect of rate cuts and the potential for AI-led productivity gains meant that economic growth could tick up making Debt/GDP ratios look less stretched with time.
But the US-Iran War changed all that. The conflict in the Gulf and the closure of the world’s largest oil shipping lane has sent oil and related product prices up, nudging up inflation risk and raising the prospects of rate hikes, not rate cuts. Rising concerns around debt affordability, a new Fed chair and geopolitical tension only add to the febrile mood. What is going on in the Bond market? 
Rob Davies, UK equity income strategist at Elston, comments in FT Adviser on how higher bond yields affect equities.
"The time value of money means that with higher bond yields, future income (whether coupons from bonds, or dividends from shares) are valued less, in today's terms. Equity investors can mitigate that impact by investing in "shorter duration equities" that generate near-term dividends, rather than "longer duration equities" that may or may not generate dividends in the distant future. Put simply, when the going gets rough, jam today is worth more than jam tomorrow." Read the full article below  Andrea Acimovic, portfolio strategist at Elston, speaks to ETF Express about what ETF education should look like for advisers today.
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