Blending Index and Active
Blending index-based investments like ETFs with active management strategies can offer a number of benefits, including reducing overall costs versus an all-active portfolio and improving benchmark tracking. For many investors, blending takes the form of a "core/satellite" portfolio. For example, large-cap domestic equity is implemented with ETFs, and active management is used for "satellite" investments with higher return and risk profiles.
Investors may even choose to blend index and active within a single asset class. Having part of an asset class allocated to an ETF frees up the investor's active