Wealth Management
U.S. equities have continued to grind higher, supported by resilient earnings and a steady economic backdrop, prompting increased speculation that markets may be shifting into a more selective, late-cycle environment. Technology names remain a key driver of sentiment, fueled by expectations that AI-related capital spending will shape corporate investment.
In fixed income, lingering inflation pressures and uncertainty around future monetary policy have kept interest-rate expectations volatile, making duration risk harder to navigate. Against this backdrop, investors are showing a growing preference for multi-asset income strategies that can blend dividends, high-yield credit, and alternative income sources to support total return through shifting cycles.
High-yield credit’s relative resilience has only strengthened the view that diversified, multi-asset income portfolios may be better positioned to withstand volatility as markets adjust to evolving macro conditions.
Finsum: Diversifying when the landscape is uncertain is good for gains as well as risk.
Active taxable fixed-income strategies are attracting renewed interest as many investors recognize that the bond market’s complexity can create opportunities for skilled managers to add value.
Rather than relying solely on broad benchmarks, these funds aim to navigate shifting interest-rate environments, credit cycles, and liquidity constraints more dynamically. The strongest offerings span a wide range of categories, from ultrashort and short-term bonds to intermediate core, core-plus, and even emerging-markets debt, giving investors multiple ways to tailor portfolios.
For most, intermediate bond strategies remain the backbone of a diversified fixed-income allocation, while short-duration funds offer stability for money needed in the near term. Costs remain a key factor, as lower-fee share classes and ETF structures often provide a clearer path to outperformance.
Finsum: High-quality active bond funds offer investors a compelling way to seek better risk-adjusted returns.
Institutional appetite for sustainable investing is rising sharply, with more than 80% of global asset owners and managers planning to increase allocations over the next two years, according to Morgan Stanley’s new Sustainable Signals 2025 report.
Surveyed investors overwhelmingly cited strong performance and the growing maturity of ESG strategies as the primary reasons behind their expanding commitments. Demand is also reshaping the competitive landscape, as roughly 9 in 10 asset owners now view sustainable investment options as a key differentiator when selecting or retaining managers.
Top areas of focus include renewable energy, energy efficiency, and, surging in priority this year, climate adaptation, reflecting mounting concern about physical climate risks and their impact on asset prices.
Finsum: ESG remains a long term play as the short run outlook appears clouded by regulatory changes.
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Large-cap growth stocks include many of the market’s most innovative and resilient companies, and tilt toward mega-cap tech and consumer names has helped fuel their long-term performance. U.S. large-cap growth ETFs provide concentrated exposure to the companies that have played a major role in shaping the modern economy.
This focus has benefited QQQ over the past decade, supported by the outperformance of mega-cap stocks and strong results from the technology sector. While no strategy works in every market environment, growth companies, often characterized by rapid earnings expansion and reinvestment in new technologies, have historically contributed to long-term capital appreciation, even with the higher volatility that can accompany them.
For many investors, large-cap growth strategies like QQQ serve as a core allocation, offering access to companies driving economic transformation from cloud computing to artificial intelligence.
Finsum: Although growth stocks can be more sensitive to interest rates and market cycles, they remain key components of portfolios aiming to capture the momentum and innovation.
Derivative income ETFs are gaining momentum with financial advisors as firms broaden their income-generation strategies amid ongoing market volatility and shifting client expectations. Cerulli Associates reports that 15.2% of advisors used derivative income strategies in 2024, with another 7% planning to adopt them, led by strong uptake in wirehouses and increasing interest across independent and regional broker-dealers.
Defined as liquid alternatives that generate income through option-selling, these ETFs drew $26 billion in net inflows in 2023 and $29 billion in 2024, with advisor demand expected to continue rising.
Cerulli notes that inflation-beating returns and expanding issuer participation are driving growth, as the ETF structure reshapes how income-oriented solutions are designed and delivered.
Finsum: Defined outcome ETFs are also expanding, as investor demand for downside protection and predictable outcomes continues to strengthen.
Working with high-net-worth (HNW) clients offers advisors the opportunity to grow assets under management and revenue, but winning these relationships requires delivering more specialized expertise. Wealthy investors tend to prioritize education, performance and deep relationship-building, while focusing heavily on wealth preservation and legacy planning.
Surveys show that most HNW households plan to transfer wealth during their lifetimes, worry about healthcare costs and inflation, and are highly engaged in charitable giving, valuable insights that can help advisors shape their service models.
To meet this demand, firms can expand into estate planning, succession planning, tax strategy and other complex services that align with affluent investors’ needs. Advisors who collaborate with estate attorneys, CPAs and other centers of influence may find it easier to build credibility and attract HNW prospects through referrals.
Finsum: Ultimately, growing an advisory practice in the HNW segment comes down to offering sophisticated, personalized planning that speaks directly to the financial realities.