Displaying items by tag: models

It was only eight months ago that LPL was beginning a pilot program where they would test separately managed accounts, but now they are jumping in full force by allowing investors SMA strats in their Model Wealth Portfolios platform. This platform has grown to $83 billion in assets in recent years. These models will range in variety and flavor as well with some being developed by LPL while others will be from third-party managers. This strategy helps LPL give institutional-type options to everyday investors with lower fees.

Finsum: Models are moving from a buzzword to an important option for advisors.

Global X ETFs is launching a new model portfolio concentrating its theme on tech disruption and other global structural changes. The models were developed by CIO Jon Maier at Global X and hope to capture the disruptive growth that many tech companies have benefited from in the last two decades. This comes as part of a larger trend in Global X and other US-based ETF companies to capture the Euro area markets. The Euro area has been dominated by low return high fee funds and has been a ripe market for higher returning lower fee ETFs. These thematic funds can capture areas of the economy that are poised for rapid growth.

Finsum: Rising interest rates could make it tough on growth funds over the next 3-5 years.

Goldman Sachs is acquiring NextCapital, a quickly growing fintech company that provides digital advice targeting corporate retirement plans. This is one of Goldman’s five largest asset management acquisitions and will aim to develop relationships with corporate employees. This will also provide a stable source of revenue which plays nicely with its more traditional trading activities. Morgan Stanley and JPMorgan are both ratcheting up acquisitions in fintech that offer better relationships with corporate employees. Next Capital is a little over eight years old and has raised $85 million in its most recent funding round.

Finsum: This could form the foundation of a relationship between many employees in the US and GS providing an avenue for future clients.

One of the biggest criticisms of model portfolios is that they are opaque black boxes that investors are worried about, but BlackRock could be shaking things up. A new suite of actively managed model portfolios will be registered on the Nasdaq Fund Network. The models will be available across a variety of ‘themes’ and will be registered with six-character symbols. NFN will dismantle statistics and strategy to increase transparency for the Models. Model portfolios were once an obscure investment but they are growing in popularity and hopefully building a better bridge to advisors and portfolio managers.

Finsum: This is a big step for models and will hopefully increase confidence in them as a product with investors.

Model portfolios have been a surprisingly quick growing tool for the financial industry in the last year, and Morgan sStanley’s Wealth Management is capitalizing by adding a series of new model portfolios. These strategies will have hefty minimums of $750k to $1.5 million and are targeting tax and direct indexing strategies from the recently acquired Parametric. This was a key reason Morgan Stanley acquired Parametric last year to rapidly develop and deploy direct indexing strategies. Overall the portfolios have acquired $150 million in assets since their inception in January.

Finsum: Financial companies took a page out of tech companies playbook by just acquiring the companies that might align with them and allow the to quickly scale when it came to direct indexing.