In today’s market, financial advisors can show real value by building actively managed, customized portfolios using low-cost passive ETFs instead of pricier active funds. A core-and-satellite approach — with an S&P 500 ETF at the center and defensive sectors, bonds, and gold ETFs as satellites — has proven particularly effective in 2025, outperforming the broader market. 

Strategic rebalancing between the outperforming satellites and a weakening core has been key to managing risk and enhancing returns. Defensive ETFs like XLP, XLU, and XLV, along with bond funds like AGG and SGOV and the gold-focused GLDM, have offered strong, risk-adjusted performance this year. 

This flexible framework allows advisors to adjust portfolios to market conditions, client goals, or macroeconomic shifts while keeping costs low and transparency high. 

Finsum: Ultimately, it strengthens the advisor’s role as an active, thoughtful manager of client wealth without relying on expensive fund managers.

Cerulli Research highlights how the growing wealth of retail investors is pushing advisors to prioritize tax efficiency, with ETFs becoming an increasingly attractive structure. ETFs offer significant tax advantages, such as low turnover and minimized capital gains distributions, making them particularly appealing in today’s uncertain economic climate. 

As a result, Cerulli expects more separately managed account (SMA) assets to shift into ETFs, driven by both tax benefits and operational efficiencies. High net worth advisors are also focusing more heavily on tax planning, with the percentage offering tax guidance rising sharply in recent years. 

Despite the $2.7 trillion currently held in SMAs, advisors are steadily increasing their ETF allocations, especially at larger practices. However, barriers like the high cost of launching ETFs mean wealth management firms will need scale — and may increasingly turn to white-label providers for help — to fully capitalize on this shift.

Finsum: Separately managed accounts could definitely see a spike in popularity in the coming years given technological ease. 

American Energy Fund (AEF) has broadened its asset-backed investment lineup, opening access to domestic oil and gas projects for qualified investors. The new opportunities include ventures in the Permian Basin and North Texas, featuring on-site briefings and a focus on operational transparency. 

AEF believes that in today’s turbulent markets, energy investments are regaining appeal as a reliable asset class. These offerings are limited to accredited investors, meaning participants must meet specific wealth, income, or professional standards set by financial regulators. 

By tailoring these opportunities to sophisticated investors, AEF aims to blend performance, visibility, and compliance into its energy investment strategy.

Finsum: The current administration is no doubt making it friendlier for the energy sector, but will tariffs hinder any regulatory ease. 

The rapid growth of open-end funds investing in illiquid assets—like real estate, private equity, and credit—has introduced both opportunity and fragility, particularly due to stale pricing risks that can lead to wealth transfers between investors. 

Research shows that these funds often experience artificially smooth and lagged returns, which can mislead investors about actual performance and risk, enabling NAV-timing strategies that exploit predictable price movements. Spencer Couts and colleagues developed a more advanced return unsmoothing method to correct for spurious autocorrelation and better measure fund risk and performance, especially in highly illiquid private credit funds. 

However, interval and tender-offer funds help manage these risks by limiting capital flows and allowing managers to avoid forced sales or purchases of illiquid assets.

Finsum: Pooling capital through regulated open-end structures with controlled liquidity offers a more stable way to invest in illiquid markets.

Blackstone beat first-quarter profit expectations, with distributable earnings rising 11% to $1.41 billion, or $1.09 per share, fueled by strong private equity and credit business performance. Despite the earnings beat, CEO Stephen Schwarzman cautioned that rising market volatility—driven largely by tariff uncertainty—may slow down asset sales in the near term. 

The firm brought in $61.64 billion in inflows, with nearly half directed toward its credit and insurance segment, pushing assets under management to $1.17 trillion. While the private equity division posted a 13% increase in earnings thanks to $6.5 billion in asset sales, the real estate unit remained a drag with a 6% decline in AUM. 

Schwarzman emphasized that a swift resolution to tariff disputes is vital to sustaining economic growth, echoing broader recession concerns from the business community. Despite turbulent markets, Blackstone sees potential in deploying its $177 billion in dry powder amid growing investor caution.

Finsum: Some alts will prove more fruitful in the face of tariffs but fund composition will matter greatly in the P/E space.