Bonds: Total Market
Investing in bonds has gained popularity, facilitated by platforms like Webull and Public. Bonds come in three main types: U.S. Treasury bonds, corporate bonds, and municipal bonds, each with distinct tax implications.
U.S. Treasury bonds are state and local tax-exempt, corporate bonds are fully taxable, and municipal bonds often enjoy federal and state/local tax exemptions. Credit quality is vital, with investment-grade bonds rated BBB- or higher by S&P and Baa3 or higher by Moody’s.
Comparing after-tax and taxable-equivalent yields helps investors decide the best options based on their tax brackets. Additionally, understanding the yield to maturity and coupon rates of bonds, such as those from can aid in making informed investment decisions
Finsum: Alternatively, ETFs and other products can make a wider exposure to bonds a little easier.
Cboe Global Markets has listed five spot Ethereum ETFs set to begin trading in the US on July 23, 2024. Following the SEC's approval of Bitcoin ETFs earlier this year, market participants are eager for the new Ethereum ETFs.
With Ethereum's market cap second only to Bitcoin, issuers such as Fidelity, iShares, Bitwise, VanEck, 21Shares, Invesco Galaxy, Franklin Templeton, and Grayscale have already listed Bitcoin ETFs and are now expanding to Ethereum.
This move marks a significant milestone for institutional and retail crypto investments, reflecting growing global interest in cryptocurrency ETFs.
Finsum: Cryptos will be powered by its ability to enter more mainstream financial products over the coming decade.
WisdomTree has partnered with Trading 212 to introduce six ETF model portfolios, allowing UK and European retail investors to access pre-built core and thematic portfolios through the Trading 212 app.
The three core portfolios—Conservative, Moderate, and Aggressive—offer diversified exposure to equities, bonds, and commodities. Additionally, investors can choose from Multi-Thematic, Tech, and Environmental thematic portfolios.
This collaboration aims to simplify portfolio building for retail investors by leveraging WisdomTree's institutional expertise to help meet long-term investment goals. Trading 212 manages £4bn in client assets with 3 million funded accounts.
Finsum: Thematic models might be a way to get into technology as it’s poised to rally with interest rates settled or about to be cut.
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Bond investors should closely monitor their allocation and management strategies, given the current favorable real Treasury bond yields above 2% and even higher yields on investment-grade bonds.
Bonds are now competitive with other asset classes, a situation not seen in decades due to historically low central bank policy rates. Despite this, many investors continue to neglect their bond allocations, possibly due to poor returns over the past decade. Passive bond index funds and ETFs, like the Vanguard Total Bond Market II Index Fund and iShares Core U.S.
Aggregate Bond ETF, have gained popularity but may not align with all investors' objectives. Active bond management, which can better match investment goals and risk tolerance, often outperforms passive strategies even after fees. Investors should consider a more active approach to bond investing to optimize their portfolio performance and risk management.
Finsum: A rate cut seems more likely given the economic outlook and investors should plan accordingly
Direct indexing allows investors to access the individual stocks in their portfolio, providing opportunities for tax-loss harvesting. Unlike index funds, direct indexing offers the performance and diversification benefits of an index but with the ability to customize holdings.
This strategy enables investors to manage exposure to specific companies or sectors and capitalize on market dips for tax-loss opportunities. While index funds offer simplicity and tax efficiency, direct indexing takes these benefits a step further by allowing more personalized portfolio adjustments.
However, setting up a direct indexing account can be costly and involves higher fees due to its active management. Despite this, the customization and tax benefits can be worthwhile for certain investors, especially those in higher tax brackets or with concentrated stock positions.
Finsum: With fees and minimums getting lower and lower, direct indexing is becoming an option for a wider audience.
Vanguard’s low-cost ETFs are immensely popular, with options like Vanguard Total Stock Market ETF and Vanguard S&P 500 ETF leading the pack. However, there are other notablev ETFs that can enhance your portfolio if you venture beyond these well-known choices:
VBR, a Gold-rated ETF, focuses on small-cap value stocks and charges an exceptionally low 0.07% expense ratio. This ETF has consistently outperformed its category peers, despite small-cap value funds being out of favor for many years.
BNDX, a Silver-rated ETF, offers exposure to the global bond market, complementing a U.S.-heavy bond allocation. It invests in a diverse portfolio of foreign investment-grade bonds, hedging against currency risk, with an equally low expense ratio of 0.07%.
Finally, VT provides exposure to nearly 10,000 stocks worldwide, including U.S., foreign, and emerging markets, making it one of the broadest stock ETFs available. With its diverse mix, it can serve as a comprehensive, standalone stock investment for long-term portfolios.
Finsum: The last one to consider might be a momentum fund as interest rates drop and growth picks up.