(New York)

One of the things the growing ETF markets lacks is many options regarding private equity, and with good reason. The returns of the sector are hard to reproduce with publicly traded stocks. But getting private equity returns can be difficult to attain anyway because of the challenges of investing in the sector, especially for investors who are not at the wealthiest end of the spectrum. However, there are two newish ETFs on the market, BUYN and BUY, which use an investing methodology developed at Harvard to try to replicate the returns of the private equity sector. The provider is SummerHaven, who comments about their funds that “We believe that these ETFs based on our private equity strategy indexes will provide investors with an opportunity to access returns comparable to an asset class that has traditionally only been available through private markets, with the added benefit of liquidity and transparent and without lockups, vintage risk, investment minimums or takeover premiums. These ETFs will allow both retail and institutional investors an opportunity to access private equity strategy returns at substantially lower fees”.

FINSUM: On paper these sound like an interesting option, but only time will tell if the strategy actually achieves what it says. The ETFs are especially unproven because the Harvard paper which underpins the strategy was only published last year.

(New York)

Don’t worry, this is a not a story about DOL rule resurrection. The rule remains all-but-dead. This article is about how despite the rule being effectively gone, it has succeeded in completely changing the industry. The famed Michael Kitces summarized the DOL rule’s effect this way, saying “The DOL fiduciary rule really made the discussion of fiduciary for consumers mainstream … You can’t un-ring that bell”. Barron’s focuses on the material changes to offerings in their view, saying “The short-lived standard spurred the industry to lower fees, and prompted brokerages to prune their product lineups and remove conflicts of interest from their compensation structures. These changes are expected to outlive the rule”.

FINSUM: The DOL rule may be gone, but it will certainly never be forgotten.

(New York)

Are you on the look out for income stocks? While their position in one’s portfolio is changing given rising rates, good income stocks, especially safe ones, are always of value. The S&P 500 is currently only yielding about 2%, which is now less than two-year Treasuries. However, one can find very strong stocks with 3-4% yields. Those include Target and Qualcomm, the latter of which is yielding 4.2% and is a very well-covered stock. Also check out Seagate, CenturyLink, Pitney Bowes, and Navient.

FINSUM: These picks come from what seems to be a very diligent dividend-focused manager that was recently profiled in Barron’s. Our big question is how much dividend stocks might suffer in a rising rate period.

(New York)

Fidelity appears to be on the verge of making one of the most important adoptions of cryptocurrencies by a major financial player to-date. According to Business Insider, Fidelity has just posted jobs on its site looking to hire people “to help engineer, create, and deploy a Digital Asset exchange to both a public and private cloud”. According to BI, “If Fidelity does launch a crypto exchange offering, it would arguably be among the biggest moves by a large Wall Street firm into the nascent crypto market, which stands at about $350 billion”. Fidelity already allows clients to see their crypto holdings alongside their conventional assets.

FINSUM: It sounds like Fidelity is planning to opening a crypto trading exchange. That would be a very important move to legitimate the asset class.

(New York)

Most advisors will be familiar with CITs, or collective investment trusts, but outside of wealth management, they are little discussed. Therefore, it may be interesting to learn that the industry has been growing strongly and is approaching $3 tn. A lot of the growth has been through 401(k) sponsors adding CITs to their menus. However, the products may have benefits for many, as they essentially use a mutual fund structure, but have significantly lower fees and distribution costs because they are not subject to SEC rules. According to one money manager, “CITs have always been an option for the retirement market, but once a manager sees that they can offer a CIT cost-effectively, it’s a no-brainer”.

FINSUM: This seems like a poorly understood, but potentially value option for many.