Anyone see the copy desk? It appears the definition of the fiduciary might be in for a rewrite, according to winkintel.com.

At this point, the Department of Labor needs to rewrite its fiduciary definition to all but make all first time advice fiduciary is just about the lone thing still on the table, analysts concur.

In that event, the alternation would pull weight and basically revert the DOL back to its maiden 2016 fiduciary rule, said Brad Campbell, partner at Faegre Drinker law firm. As it stands, the DOL’s package known as the investment advice rule makes rollover advice fiduciary, the site continued.

Valuable investment advice consists of two primary elements. One evolves around a new prohibited transaction exemption. Here, advisors can provide conflicted advice for commissions. The other is a reinstatement of the 1975 “live part test” in order to ascertain that which constitutes advice on investments.

Campbell noted the initiative’s “likely to be a very substantial proposal that will harken back to legal fights of 2016, which the DOL ultimately lost,” according to fa-mag.com.

The DOL, he continued, “is taking the position that fiduciary starts with the initial or rollover conversation. That's a pretty aggressive reinterpretation of what they historically had said, which frankly was ... that most rollovers were not fiduciary,”.

There is no question ESG strategies have seen their fair share of negative press lately, but a new deterrent for investors may lead to more pressure for some asset managers. According to a paper by André Wattø Sjuve, a scholar from the Norwegian School of Economics, ESG funds that charge higher fees are seeing outflows, while ESG funds that charge lower fees are seeing inflows. The study looked at the capital flow data of over 16,000 mutual funds during a period between August 2018 and September 2021. These findings indicate that investors are just as concerned over high fees with ESG funds as they are with other strategies. This doesn’t bode well for asset managers charging higher fees based on the massive demand for sustainable investing strategies. Sjuve believes a possible explanation for outflows out of expensive funds is that prices of ESG assets have risen substantially over the past few years and investors could be concerned about the prospects of future returns.

Finsum:As theprices of ESG assets skyrocket, investors are leaving higher fee ESG strategies for lower-cost funds.

Touchstone Investments, which is known for its Distinctively Active® funds, recently announced the launch of its fourth actively managed ETF, the Touchstone Ultra Short Income ETF (TUSI). The fund, which started trading on the Cboe BZX, seeks maximum total return consistent with the preservation of capital by primarily investing in a diversified portfolio of investment grade fixed income securities. Its portfolio is managed to maintain an effective duration of one year or less under normal market conditions. Managers for TUSI buy fixed-income securities believed to be attractively priced relative to the market or similar securities. The launch follows three actively managed ETFs launched during the summer including the Touchstone Strategic Income Opportunities ETF (SIO), the Touchstone US Large Cap Focused ETF (BZX), and the Touchstone Dividend Select ETF (DVND). Each ETF has a corresponding mutual fund that shares a similar investment strategy. All four ETFs are sub-advised by Fort Washington Investment Advisors. 

Finsum:Touchstone Investments recently launched the Touchstone Ultra Short Income ETF, its fourth actively managed ETF launch this summer.

According to Refinitiv Lipper’s fund flows, fixed income ETFs saw a net $4.5 billion in weekly outflows for the week ending on August 24th, 2022. This marked the group’s first weekly outflows in nine weeks. This also corresponded with bond ETF’s third straight week of average negative returns. The bond types with the largest outflows included corporate high yield ETFs with $3.0 billion in outflows, corporate investment grade ETFs with $733 million in outflows, and government Treasury ETFs with $570 million in weekly outflows. Corporate high yield ETFs had their eighth largest weekly outflows to date, while corporate investment grade ETFs saw their first week of outflows in eight weeks. However, not all fixed-income ETFs saw outflows. International & global debt ETFs saw $101 million in inflows and government mortgage ETFs saw $15 million in weekly inflows. Those were the only two fixed-income groups to report inflows.

Finsum:With fixed income ETFs seeing their third straight week of negative average returns, bond ETFs see their first outflows in nine weeks. 

Few probably are pounding away for a repeat performance of the bond markets in the first half of the year. But an upbeat perspective among investors is warranted, according to corporate.vanguard.com. And, why, pre tell, is that? Bonds are on the precipice to dispense a spike in real income and restart their role of diversifying portfolios.

Even so, however, the road ahead is sprinkled with a plethora uncertainties and variables. The upshot: among other things, for another season, inflation seems bound to remain abnormally high.

At the same time, unlike the recent past, corporates, municipals, high yield, and emerging markets pose plenty of chances for growth.

Bloomberg Barclay’s US Aggregate Bond Index plunged 8.8% since January, according to fidelity.com. That was its steepest drop off in 40 years. What’s up? Investor trepidations over rising interest rates and the fear it could put a dent in the price tag on bonds. That usually translates into a drop in bond prices and rising bond yields.

However, it also could be where opportunity knocks. The Fed’s plan to revert rates to “more historically normal levels” could tee up a chance in bonds for may of those with an eye on income, principle protection and diversification in the second half of the year and more.

Like easy? Launched earlier in the month, sole and institutional investors will experience an easier process to trade the most current benchmark U.S. Treasuries thanks to a new series of exchanged traded funds, according to reuters.com. It sheds on the maturing ETFs within the fixed income terrain.

While treasuries, of course, are among the bevy of the world’s most liquid securities, particularly for investors who need to frequently roll them over to sustain the maturity, trading them can be plodding.

"This gives (investors) a tool to say, we really want to focus on how we execute our investment strategy, as opposed to how effectively we trade Treasury bonds," said F/m President Alex Morris.

The new ETFs, which will eventually include more maturities, as well as options, will make it easier for people managing bond portfolios in a precise way, said Dave Nadig, director of research at ETF Flows.

"I put this in the category of sharp tools in the drawer," he said. "For most investors, I don't think it's relevant. For investors that need this product, it's a godsend."

Meantime, it’s largely been coming up roses for fixed income ETFs. Their ranks have swelled, piquing the interest of fresh investors, according to thestreet.com.

And talk about a high ceiling. Last month, the ETF industry hit a worldwide high of $862 billion in assets under management, shattering records. As of July 31 in this country, 706 ETFs from 22 providers drew $582 billion.

No, it seems the investment industry isn’t singularly focused on, well, the old bank account. Turns out that over the past few years, environmental, social, and governance or ESGs infiltrated and lassoed the conscious of the country – including the investment landscape, according to loma.org.

Of the $51.4 trillion assets professionally managed in the U.S. as 2019 wound down, $17.1 trillion represented sustainable investing assets, estimated The Forum for Sustainable and Responsible investment.  

ESG 1.0 was marked by a top down approach to the implementation of ESG policies, according to forbes.com. Those policies don’t include a method by which to quantifiably gauge their effect. Those companies boasting a desire to satisfy consumer interests or taking a run at reversing public perception could forward their initiatives stemming from ESG with few methods available through which to fact check. 

Investors see that one of the foremost challenges of the decade encompasses resolving the climate crisis, the site continued. From 2020 to 2021, the ESG experienced a doubling in funds – a trend expected to extend into the future.  ESG assets will tip $30 trillion by 203, according to predictions in a report from Broadridge Financial Solutions.

According to LIMRA’s U.S. Individual Annuity Sales survey, U.S. annuity sales increased 16% to $79.4 billion during the second quarter. The top selling annuities were fixed-rated deferred annuities, which posted their best quarterly sales result ever. Sales came in at $28.7 billion, a jump of 79% from the prior year’s quarter. In fact, all fixed annuities showed positive growth. Fixed-rate deferred annuities are contracts that offer investors a fixed annual percentage yield with tax-deferred growth. They typically offer a higher rate of growth instead of an income stream over a specific period. The massive jump in sales can be attributed to the volatility in the markets this year and rising interest rates. The current average yield on a fixed-rate deferred annuity is around 3% or higher. Sales for traditional variable annuities didn't fare so well, falling 27% year over year to $16.5 billion, the lowest quarterly sales since 1995 due to market volatility. Variable annuities are tied to the market with no downside protection.

Finsum:Driven by market volatility, sales for fixed-rate deferred annuities had their highest quarter ever. 

Analysts at Jefferies are warning investors to avoid small-cap tech stocks due to their high valuations and falling earnings and revenue estimates. In a note, analysts said that their current valuations of 3.4 times sales are not cheap compared to their long-term average of 2.1 times sales. They believe there are “too many nonearners” and then tend to perform poorly when the Fed is hiking interest rates. However, the analysts aren’t telling investors to avoid small-cap stocks altogether, as they like names in the healthcare and consumer-discretionary sectors, which have been outperforming. Analysts stated that valuations in healthcare stocks haven’t jumped as much as their stock performance. Plus, mergers and acquisitions have picked up in the healthcare sector, which the analysts believe could help drive performance. They also believe that discretionary stocks are the cheapest sector in the small-cap range and they tend to outperform when coming out of bear markets.

Finsum:Jeffries analysts are warning investors to steer clear of small-cap tech stocks due to high valuations and falling earnings and revenue estimates. 

The idea of customization rocks your financial world, does it? 

Well, then, direct indexing just might speak to you. 

You might that to kick things off, most direct indexing could be labelled as somewhat boiler plate, yielding access to a handful of core indexes like the S&P 500 or Schwab 1000, according to yahoo.com. Then comes the customization, with the opportunity to personalize the portfolio. How? By pruning out certain companies it contains.

The catalyst behind such decisions could be, oh, say, personal values and beliefs like leaving out fossil fuel producers gun manufacturers and alcohol, the site continued.

The degree of transparency into each holding available through direct indexing can generate additional chances to personalize investments.

Investors can scoop up the stocks of an index instead of a mutual find or exchange-traded fund through direct indexing, according to cnbc.com.

While direct indexing was once the exclusive domain of those boasting mega dollars, the mainstream’s been getting on board as well. The likes of Vanguard, BlackRock and Morgan Stanley are providing offerings to abet the ability of individuals to personalize their positions based on factors like risk tolerance.