Arguments about the use of ETFs within a portfolio typically focus on the active versus passive, but many believe this is overly simplistic and ignores the product’s wider use as an asset allocation tool.

Understandably in recent months, investors’ focus has been centred almost entirely on performance.

In the carnage of the credit crunch, many managers have underperformed their benchmarks and only a handful actually produced absolute returns.

Most equity indices are also obviously down over the period but many investors are having to swallow the bitter pill of having paid active managers upwards of 1% for failing to beat the market.

There is a welter of analysis out there on the active/passive debate, most of which comes down on the side of the latter.

According to recent work by Cass Business School for example, only around 2% of all active funds truly outperform their benchmarks over the long term and up to a fifth underperform significantly.

Work from Morgan Stanley’s research head Paul Mazzilli is equally damning for the active camp, with its title – ETFs provide attractive alternatives to open-end mutual funds – indicating its slant.

Its findings are somewhat skewed by prevalent market styles of the last decade but are still hard to defend for active advocates.