You heard it here folks, but it was in jest — mostly.

Alan Reid, founder and chief executive of Forward [profile], called ETFs "UnAmerican" during a general session of the ICI GMM held in Washington, D.C. at the Marriott Wardman Park.

"Index investing is positively un-American," Reid joked to the 3,000 conference attendees who were attending the morning session titled "Fund Leadership in a Changed World."

The session was moderated by Marie Chandoha, president and chief executive officer of Charles Schwab Investment Management [profile]. In addition to Reid, the session featured Elizabeth Corley, global chief executive of Allianz Global Investors, and Scott Powers, president and chief executive of State Street Global Advisors [profile].

Reid made the humorous comment during a conversation thread led by Chandoha on the growth of ETFs. Reid said that engaging in ETFs is sort of the reverse of the "Lake Wobegone" motif, in which everyone wants "to be just a little bit below average."

All kidding aside, Reid said that ETFs and indexed funds are a useful tool for tactical investing.

Indeed, tactical investing and risk-tailored solutions were big topics during the panel discussion.

"We have spent a lot of time thinking about the broad risk for our clients," Powers said of SSgA's thinking processes.

Chandoha said that the demand is booming for solutions based products, in which asset managers provide not only funds or ETFs but guidance on how to integrate these funds into portfolios designed to address varying needs and demands of their clients.

Allianz's Corley said that her company is working with a growing number of advisors on this subject.

"They (advisors) need volatility managed to fit their models," she said. "It is a high growth area."

Corley added that "we like to try to understand what the clients and advisors needs are. Look at the risks, look around the world to find the returns and risks. You have to find out how that risk fits into the client's risk appetite."

Powers, surprisingly, expressed that he had his feet in "both camps" of active and passive investing, arguing that there are still good arguments for using both.

Other topics covered during the wide-reaching session was the use of social media (Allianz finds a lot of interest in games and competition applications on their website, while Powers admittedly bluntly that his company "is woefully far behind on the subject.), the regulatory pipeline and its potential impact on the industry, the maturing of investment clients and the razor's edge asset managers have walk on with the fixed income markets.

Reid's joke about "un-American" became a motif as he and his fellow panel members repeated the phrase to great effect, and much laughter, in the audience. 

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