After years of prioritizing safety, retirement savers are once again embracing market risk, as sales of variable annuities tied to investment fund performance surged in late 2024. According to Wink’s latest data, traditional variable annuity sales climbed 53% year over year to $18 billion, outpacing every other annuity category tracked.
Interest also rose in registered index-linked annuities, which mirror stock index performance, with sales growing 38% to $35 billion, while fixed indexed annuities grew by 22% to $32 billion. In contrast, demand dropped sharply for multi-year guaranteed annuities — down 45% to $29 billion — as fewer consumers sought fixed returns.
This rebound in market-linked products reflects renewed investor optimism but also hints at insurer caution, with some reallocating capital toward products that require less financial backing.
Finsum: Expiring surrender periods on older annuities may be freeing up funds for reinvestment, fueling the uptick in new variable annuity contracts.
In today’s market, financial advisors can show real value by building actively managed, customized portfolios using low-cost passive ETFs instead of pricier active funds. A core-and-satellite approach — with an S&P 500 ETF at the center and defensive sectors, bonds, and gold ETFs as satellites — has proven particularly effective in 2025, outperforming the broader market.
Strategic rebalancing between the outperforming satellites and a weakening core has been key to managing risk and enhancing returns. Defensive ETFs like XLP, XLU, and XLV, along with bond funds like AGG and SGOV and the gold-focused GLDM, have offered strong, risk-adjusted performance this year.
This flexible framework allows advisors to adjust portfolios to market conditions, client goals, or macroeconomic shifts while keeping costs low and transparency high.
Finsum: Ultimately, it strengthens the advisor’s role as an active, thoughtful manager of client wealth without relying on expensive fund managers.
Cerulli Research highlights how the growing wealth of retail investors is pushing advisors to prioritize tax efficiency, with ETFs becoming an increasingly attractive structure. ETFs offer significant tax advantages, such as low turnover and minimized capital gains distributions, making them particularly appealing in today’s uncertain economic climate.
As a result, Cerulli expects more separately managed account (SMA) assets to shift into ETFs, driven by both tax benefits and operational efficiencies. High net worth advisors are also focusing more heavily on tax planning, with the percentage offering tax guidance rising sharply in recent years.
Despite the $2.7 trillion currently held in SMAs, advisors are steadily increasing their ETF allocations, especially at larger practices. However, barriers like the high cost of launching ETFs mean wealth management firms will need scale — and may increasingly turn to white-label providers for help — to fully capitalize on this shift.
Finsum: Separately managed accounts could definitely see a spike in popularity in the coming years given technological ease.
The rapid growth of open-end funds investing in illiquid assets—like real estate, private equity, and credit—has introduced both opportunity and fragility, particularly due to stale pricing risks that can lead to wealth transfers between investors.
Research shows that these funds often experience artificially smooth and lagged returns, which can mislead investors about actual performance and risk, enabling NAV-timing strategies that exploit predictable price movements. Spencer Couts and colleagues developed a more advanced return unsmoothing method to correct for spurious autocorrelation and better measure fund risk and performance, especially in highly illiquid private credit funds.
However, interval and tender-offer funds help manage these risks by limiting capital flows and allowing managers to avoid forced sales or purchases of illiquid assets.
Finsum: Pooling capital through regulated open-end structures with controlled liquidity offers a more stable way to invest in illiquid markets.
Blackstone beat first-quarter profit expectations, with distributable earnings rising 11% to $1.41 billion, or $1.09 per share, fueled by strong private equity and credit business performance. Despite the earnings beat, CEO Stephen Schwarzman cautioned that rising market volatility—driven largely by tariff uncertainty—may slow down asset sales in the near term.
The firm brought in $61.64 billion in inflows, with nearly half directed toward its credit and insurance segment, pushing assets under management to $1.17 trillion. While the private equity division posted a 13% increase in earnings thanks to $6.5 billion in asset sales, the real estate unit remained a drag with a 6% decline in AUM.
Schwarzman emphasized that a swift resolution to tariff disputes is vital to sustaining economic growth, echoing broader recession concerns from the business community. Despite turbulent markets, Blackstone sees potential in deploying its $177 billion in dry powder amid growing investor caution.
Finsum: Some alts will prove more fruitful in the face of tariffs but fund composition will matter greatly in the P/E space.
State Street Global Advisors has launched a new series of target date funds—called the Target Retirement IndexPlus Strategy—that includes a 10% allocation to private markets managed by Apollo.
These funds, structured as collective investment trusts (CITs), pair State Street’s index strategies for public markets with Apollo’s evergreen fund providing exposure to private credit, equity, and real assets. Brendan Curran of State Street likens this evolution to shifting into a new gear in retirement investing, acknowledging the growing significance of private assets in diversified portfolios.
The collaboration follows earlier efforts between State Street and Apollo, including the launch of a private credit ETF. Apollo views this as part of its broader push to tap into the wealth management space and expand access to private investments, aiming to grow its assets in this segment to $150 billion by 2029.
Finsum: The launch reflects a broader trend of asset managers integrating private markets into retirement solutions to meet demand for diversification and improved outcomes.
Closed-end funds (CEFs) can be valuable additions to a diversified portfolio, offering the potential for capital growth and income through both investment performance and regular distributions.
Unlike open-end mutual funds, CEFs typically provide higher distribution rates, often paid monthly or quarterly, and allow reinvestment that may enhance long-term returns. Their fixed-share structure after IPOs means managers aren’t forced to hold cash for redemptions, allowing for more efficient and fully invested portfolios.
CEFs also give investors exposure to the illiquidity premium by enabling access to less liquid, potentially higher-yielding investments that open-end funds often avoid.
Finsum: Many CEFs may use leverage to try to boost returns, though this adds risk and volatility.
Target-date funds offer a hands-off approach to retirement investing by automatically adjusting asset allocations over time. These funds balance growth and security by shifting from stock-heavy portfolios in early years to safer investments like bonds as retirement nears.
Named for the investor’s target retirement year, these funds simplify decision-making and are commonly found in employer-sponsored 401(k) plans. A key factor in choosing one is its “glide path,” which determines whether asset adjustments stop at retirement or continue for years beyond.
While convenient, investors should compare expense ratios and investment strategies to ensure alignment with their risk tolerance. Three TDF funds to consider are:
- Vanguard Target Retirement 2045 Fund Investor Shares (VTIVX) – Expense Ratio: 0.08%
- Fidelity Freedom Index 2045 Fund Investor Class (FIOFX) – Expense Ratio: 0.12%
- T. Rowe Price Retirement 2045 Fund (TRRKX) – Expense Ratio: 0.62%
Finsum: Despite their “set it and forget it” appeal, periodic reviews help maintain a well-balanced portfolio.
Deeper tax planning integration in wealth management can enhance advisors’ ability to deliver proactive tax strategies that go beyond traditional investment management. Tax planning has become a crucial differentiator in modern wealth management, with more investors seeking advisors who can optimize after-tax returns and long-term financial outcomes.
Strategies like Roth conversions, tax-loss harvesting, and asset location are now essential tools for high-net-worth clients navigating an increasingly complex tax landscape. With concerns about rising tax rates and policy risks, forward-looking tax planning is becoming indispensable for preserving and growing client wealth.
Advisors who incorporate these strategies can build deeper client relationships, attract more assets, and position themselves competitively in an evolving industry.
Finsum: Tax strategies help give advisors an edge when dealing with clients and helping them allocate to efficient portfolios.
JP Morgan Asset Management is gearing up to introduce its first private credit interval fund, aiming to expand its footprint in private credit. This newly registered credit markets fund, filed with the SEC, will be accessible to wealth market investors.
The fund plans to maintain a diversified portfolio that includes loans, bonds, structured finance securities, and other credit-related investments. Interval funds, like this one, provide access to private market assets with periodic liquidity windows, balancing stability with limited redemption opportunities.
To manage liquidity, a portion of assets will be allocated to short-term debt instruments, money market funds, and cash reserves.
FINSUM: As investor demand for private credit grows, asset managers are increasingly tailoring products to individual investors seeking diversification.
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Cryptocurrencies tumbled as concerns over a broader U.S. stock selloff overshadowed recent efforts by President Trump to support the industry. Bitcoin dropped more than 3% in early Asian trading, while Ether sank as much as 6% to its lowest level since October 2023 before recovering some losses.
The decline followed a sharp selloff in technology stocks, with the Nasdaq 100 plunging 3.8%, its worst session since October 2022. Despite Trump’s executive order to establish a U.S. Bitcoin reserve, investor sentiment remained fragile as macroeconomic risks took center stage.
Analysts noted that leveraged crypto-related ETFs were among the hardest hit, with some plunging more than 30% in a single day. While Bitcoin hovered around $79,300, traders were eyeing key support levels at $73,000 and $70,000, where stronger buying interest could emerge.
Finsum: While many think of crypto as hedge against market volatility, we need to remember that those hedges are a little effective on the currency side.
- Flame-cooked flavors are making a strong return as diners seek the rich, smoky depth that only open-fire cooking can provide. From Texas barbecue joints to London’s Brat and Kyoto’s La Bûche, chefs around the world are reviving traditional wood-fired techniques, creating dishes that capture the essence of rustic, high-heat cooking.
- Southeast Asian cuisine is also evolving, driven by chefs who have honed their craft abroad and are now returning home to reimagine their culinary heritage. Fine-dining establishments across Malaysia, Vietnam, and Singapore are blending time-honored recipes with innovative techniques and global flavors.
- China’s food scene is undergoing a renaissance, gaining long-overdue recognition on the global stage. In Beijing, chefs are reviving imperial-era recipes once reserved for emperors, offering a taste of history with meticulously recreated royal dishes. Meanwhile, Shanghai’s Hakkasan and Obscura are infusing classic Chinese flavors with contemporary influences, merging tradition with innovation.
Finsum: We have our eye out on these culinary trends and look forward to how a traditions are honored but innovation is evolving.
The municipal bond market experienced fluctuations in 2024, with tax-free yields rising in response to Treasury yield movements, particularly in the latter half of the year. Market uncertainty increased following the Federal Reserve’s December rate cut, which coincided with ongoing inflation concerns and economic crosscurrents.
As 2025 begins, the potential extension of 2017 tax cuts under the new administration may impact demand for tax-free bonds, particularly if corporate tax rates are lowered. Climate-related risks, such as the LA fires and hurricanes, have drawn attention to municipal finance, with increased insurance costs and resilience measures potentially leading to more bond issuance.
Despite these pressures, municipal credit quality remains stable, supported by strong reserves, prudent budget management, and infrastructure reinvestment. However, challenges persist in certain sectors, including healthcare, higher education, and public K-12 schools, due to shifting demographics, rising costs, and expiring pandemic aid.
Finsum: These are important things to monitor for municipal bonds, and the increasing role of DOGE, could drastically change this bond segment.
ETF issuers are continually innovating to meet the demand for buffer strategies, appealing to financial advisors and clients who prioritize downside protection, even if it limits potential gains. Often dubbed "boomer candy" for their popularity among retirees, buffered ETFs offer a sense of security akin to a safety net for nervous investors.
The market for these ETFs has grown exponentially, with over 200 options managing nearly $46 billion in assets, a significant leap from just $200 million in 2018. These strategies typically shield against initial market declines, like the first 10%, while capping upside returns and are often tied to indices like the S&P 500.
Variations now include funds offering complete downside protection or innovative approaches like Calamos Investments’ product, which protects bitcoin’s price, but caps gain at 10%.
Finsum: Investors looking for stability particularly as they are aging could benefit from these strategies.