Motivated by this question but at institutional level.

To clarify I am not talking about the market making trading firm that arbitrages the price inefficiency of ETF and underlying assets. I am wondering why an investment/asset management firm would want to use ETF to build portfolio. For example, when I search for ishares 20+ year treasury bond etf, I come across this news

iShares 20+ Year Treasury Bond ETF (TLT) Position Increased by Advisors Preferred LLC.

As an individual retail investor an ETF like this provides many conveniences (can trade much smaller denomination, much better liquidity compare to trading small quantity of treasury OTC, save the effort to manage fix duration portfolio, etc.) for a 0.15% per year fee.

I just don't quite understand why would a firm with large amount of capital and quite a few professionals still willing to pay the fee for ETFs when trading and managing the underlying assets directly are supposed to be much easier.

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