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LPL Financial scoops up three Wells Fargo Advisors teams who are partnering up in Charlotte, North Carolina, to create a single $1.45 billion practice. The three teams, which generated $10.5 million in revenue at Wells, moved on March 2 and joined LPL’s Strategic Wealth Services channel, which launched almost three years ago and is aimed at attracting teams from full-service firms. The new practice, Carnegie Private Wealth, is led by Angie Ostendarp, Jordan Raniszeski, and Mary Sherrill Ware, whose team at Wells had $1.1 billion in assets. Ostendarp started her career at Wells’ Wachovia predecessor in 1994. Raniszeski spent all 16 years of his career at Wells, aside from a short stint at Deloitte & Touche Investment Advisors in 2004. Ware was at Wells for her whole 16-year career. Mitch Mayfield, who has nearly 30 years of experience, all at Wells and its predecessors, is partnering with Ostendarp’s team. He had known Ostendarp from the training program at Wachovia. Jeff Vandiver, who has been friends with the other advisors for 20 years and has thirty years of experience, rounds out the new practice. He started his career at Wells predecessor First Union Brokerage Services in 1993. Raniszeski said the following in a statement, “The opportunity to create our own firm at LPL with a culture that prioritizes clients’ needs and interests above everything else just felt like the right way forward.”

Finsum:LPL recruited three separate Wells Fargo teams, who are joining together to form a new combined practice at LPL as they believe its culture prioritizes clients’ needs and interests above everything else.

Investors poured into U.S government bonds Monday after last week’s collapse of Silicon Valley Bank. This sent Treasury yields plunging. The 2-year Treasury yield was recently trading at 4.06%, down 100 basis points or a full percentage point, since Wednesday. This marks the largest three-day decline for the 2-yield since Oct. 22, 1987, when the yield fell 117 basis points. That move followed the October 19th, 1987 stock market crash, which is also known as “Black Monday.” The yield on the 10-year Treasury was down just under 20 basis points. Prices soared and yields fell after news of the collapse of Silicon Valley Bank. Regulators took over the bank on Friday after mass withdrawals on Thursday led to a bank run. Regulators announced on Sunday that they would guarantee Silicon Valley Bank’s depositors. With fears of contagion across the banking sector spiking, investors looked to government bonds for safety. Investors are also rethinking how aggressive the Federal Reserve will be with rate hikes after the bank’s collapse. This helped to send short-term yields lower. The Fed is meeting next week and was expected to raise rates for the ninth time since last March. However, Silicon Valley Bank’s collapse may change that. Goldman Sachs certainly thinks so. The investment bank no longer thinks the Fed will hike rates, citing “recent stress” in the financial sector.

Finsum:After Silicon Valley Bank’s recent collapse, fears of contagion across the banking sector spread, driving investors into Treasury bonds, which sent yields tumbling.

Morgan Stanley was able to lure back an advisor and his $1.2 million team from Janney Montgomery Scott. The firm hired Drew Pickard and Matthew Poser, who together manage about $150 million in assets, from Janney. The two advisors, who had made up the Pickard Poser Wealth Group at Janney, made the switch on March 3. The pair joined the Morgan Stanley Aventura, Florida office and report to complex manager William Van Scoyoc. Pickard is returning to Morgan Stanley after a 17-year hiatus. He first joined Morgan in 1996 and remained there for nine years until leaving for Janney. Poser started his career at NYLife Distributions in 2017 but left after a year for The Fred Alger & Company. He joined Janney in 2020. In a separate move, Morgan Stanley also nabbed a $2.5 million producer from Merrill Lynch. Keith Kulesa, a solo practitioner, managed around $325 million in assets for roughly 100 clients. Kulesa, who has twenty-five years of experience, had been with Merrill since 2021 and made the move on January 13th. Kulesa’s exit marks at least the eighth high-dollar departure from Merrill Lynch in the Denver area in two years.

Finsum:Morgan Stanley lured back a $1.2 million advisor and his team from Janney while reeling in a $2.5 million advisor from Merrill Lynch. 

In a recent article for John Hancock’s Recent Viewpoints, Steve L. Deroian, Head of Asset Allocation Models and ETF Strategy offered his take on why active fixed-income ETFs provide value. Deroian noted that while active ETFs have slowly gained traction since they first appeared in 2008, there have been recent signs that investors are becoming more interested in gaining exposure to active management in ETFs. In fact, since 2008, the number of active fixed-income ETFs has grown exponentially. In John Hancock’s opinion, one factor behind the rapid growth is the changing composition of the U.S. bond market over the past ten years. Passive strategies have become much more concentrated in government debt. At the end of December, Treasuries accounted for over 40% of the Bloomberg U.S. Aggregate Bond Index, while the duration of the index has risen and is now at more than six years, indicating passive fixed-income ETFs carry a fair amount of interest-rate risk. Active fixed-income ETFs, on the other hand, aren’t required to track the benchmark. They can instead shift duration based on the manager’s outlook for interest rates. The management team can also manage sector allocation based on its ability to find relative value opportunities. Since the range of returns between fixed-income sectors can often be large, this creates an opportunity for active managers to add value over time.

Finsum:The number of active fixed-income ETFs has grown exponentially and John Hancock’s Steve L. Deroian believes one reason for that is the concentration of government debt in passive bond ETFs that carries a fair amount of interest-rate risk.

According to research from data analytics company Coalition Greenwich, the influence of some corporate bond ETFs on their underlying holdings has increased, as the electronification of fixed-income trading has created an upheaval in how bonds are traded. The firm found that the trading volumes of 12 of the largest corporate bond ETFs rose from 18% of the turnover in their constituent investment grade and high-yield bonds in 2021 to 23% in 2022. In addition, the proportion was even more marked when Coalition Greenwich narrowed its focus to the five high-yield ETFs in its study. In this case, it found average daily notional volume soared from 30.5% of the underlying bonds in 2021 to 47.4%. What this means is that ETFs accounted for nearly half of the daily traded value of the underlying bonds. Kevin McPartland, head of market structure and technology research at Coalition Greenwich stated, “In the last three years everything has changed, all bond market participants now traded at least some of their volume electronically, which was transforming the market.” The increasing share of volume traded is an indication of a revolution in which corporate bonds are traded. Fixed-income ETFs have helped to increase the electronification of the corporate bond market, which has resulted in better price discovery, liquidity, and tighter spreads.

Finsum:According to research from data analytics company Coalition Greenwich,the trading volumes of some of the largest corporate bond ETFs are rising and accounting for a higher daily traded value of the underlying bonds.

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