Wealth Management
When considering fixed income ETFs, active strategies offer notable advantages over passive ones. Unlike equity indexes, replicating a bond index like the U.S. Agg is "impossible" due to smaller bond quantities, infrequent trades, and varying maturities and credit ratings.
Active management allows flexibility to adapt to shifting bond markets and interest rate environments. The T. Rowe Price QM U.S. Bond ETF (TAGG), for example, charges eight basis points and seeks to outperform the U.S. Agg through a diverse range of investment-grade U.S. bonds.
As fixed income ETFs grow in popularity, active strategies present a valuable alternative. This trend reflects a broader move towards active management within the ETF space.
Finsum: When thinking about the advantages of active bonds its important to consider this index replicability that you can’t get in fixed income.
The traditional leisure activities have shifted in the last couple of years and one of the most prominent is cycling. The summer months highlight the many benefits of cycling, with enthusiasts like 65-year-old Brooks Boliek calling it his "longevity drug."
Research supports cycling’s health benefits, including reducing the risk of osteoarthritis and knee pain by age 65. A new study involving 2,600 participants found that cyclists were 21% less likely to show signs of osteoarthritis. The study, published in the journal Medicine & Science in Sports & Exercise, emphasizes cycling as a low-impact exercise that strengthens knee muscles and circulates joint-lubricating synovial fluid.
While the study was observational and cannot prove cause and effect, it aligns with advice from healthcare providers promoting non-weight-bearing exercises. Despite risks like overuse injuries and accidents, cycling is associated with increased longevity and can be a lifelong activity.
Finsum: Cycling also presents wonderful opportunities to engage with larger groups of enthusiasts as the communal aspect is very strong.
WisdomTree Inc. has launched Portfolio Solutions to help advisors create and manage client portfolios efficiently. With $109 billion in assets under management, WisdomTree offers three distinct services: portfolio consultations for advisor-built portfolios, CIO-managed model portfolios, and a shared CIO service for collaborative portfolio management.
These services aim to streamline asset allocation, save time, and enhance advisor-client communication. Thomas Skrobe, head of product solutions at WisdomTree, emphasized the growth opportunities these services provide for advisors.
The firm has seen significant adoption, with 2,000 U.S. advisors using WisdomTree managed models and aims to add 1,000 more by the end of the year.
Finsum: The new technology is abundant for portfolio construction, and advisors can lean on the analytics they provide to garner deeper insight.
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Citizens Financial Group is recruiting wealth advisors from larger firms, prioritizing advisors' character and commitment to client service over their previous affiliations. Thomas Metzger, the firm's senior vice president of private wealth management, has led this effort, bringing in significant teams from JPMorgan.
These recruits include a 12-person team from San Francisco with over $5 billion in assets and a four-person team from Boston with about $1 billion in assets, both previously from First Republic Bank. The collapse of First Republic and Silicon Valley Bank in early 2023 created opportunities for Citizens to expand its wealth management operations rapidly.
Citizens has opened new private wealth offices in major locations and aims to offer comprehensive, integrated services under one roof to minimize frustration points advisors face at larger firms. The bank plans to continue its growth by adding more advisor teams throughout the year.
Finsum: Firms are capitalizing on last years financial turmoil and its might be time to take advantage as well.
Real estate took one of the hardest hits in any submarket due to rising interest rates but as certainty starts to look a little clearer REITs pose to make a comeback. Several real estate investment trusts (REITs) recently received analyst upgrades, indicating substantial potential upside.
Equity Residential, which owns numerous apartment communities, was upgraded by Piper Sandler from Neutral to Overweight with a new price target of $80. Acadia Realty Trust was upgraded by JP Morgan from Underweight to Neutral, with a price target of $18. Finally, Americold Realty Trust Inc., specializing in temperature-controlled storage, saw upgrades from both Barclays and Scotiabank, with price targets set at $26 and $30, respectively. Digital Realty Trust (NYSE
Despite various market conditions, these REITs show promising growth prospects according to recent analyst evaluations.
Finsum: Investors can also look to yield as an important factor and get income exposure through REITs.
Annuities, which base their returns on market interest rates, are currently more attractive due to the highest rates since 2001. Fixed annuities are offering higher guaranteed rates, and fixed index annuities now have higher possible caps for returns.
Variable annuities are less affected by interest rate changes since their returns depend on mutual fund performance. Many annuities offer initial bonuses, which can offset surrender charges if switching from an older annuity with lower rates.
Age also impacts how beneficial high interest rates are, with younger annuity holders potentially locking in higher lifetime income. However, potential future rate cuts add urgency, but it's essential to ensure annuities align with long-term financial goals to avoid penalties.
Finsum: Fixed annuities are in a very favorable position giving a 40 year high in interest rates.