The appeal of passive investment strategies offering exposure to broad equity indexes is easy to understand. Low fees and a strong stock market have made for a compelling proposition.

For advisers concerned about relying too much on the broader market’s continued strength to meet their longer-term objectives, a middle path that combines the advantages of active and passive could be appealing.

Passive investment strategies that track indexes such as the S&P 500 or the MSCI All Country World are common client portfolio building blocks. The popular core/satellite approach typically uses the market-like returns that these passive solutions offer to balance other investments that take more active risk in…