Displaying items by tag: models

As the stock market hovers near all-time highs, investors are seeking a balance between optimism and caution, with alternative ETFs gaining traction as a popular choice for risk management and income generation. 

The latest data reveals that while U.S. equity and fixed-income ETFs lead in demand, alternatives ETFs are growing rapidly, reflecting a shift toward more diversified and protective strategies. These funds offer exposure beyond traditional stocks and bonds, incorporating elements like commodities, digital assets, and derivatives to manage risk and generate returns. 

Notably, products like the Global X Nasdaq 100 Tail Risk ETF and Fidelity's options-based portfolios are attracting attention for their innovative approaches to downside protection and income. The appeal of alternatives ETFs lies in their simplicity and accessibility, allowing even complex strategies to become core components of investor portfolios.

Finsum: Most of the time the downside of alts is the liquidity component, being able to use ETFs is a great way to counteract this. 

Leading the industry, WisdomTree, Inc. launched its Portfolio Solutions program to better support RIAs and wealth management firms. This program aims to help advisory firms customize client portfolios and embrace model portfolios, offering significant time efficiencies.

The platform offers a range of services, including examining current model portfolios, stress-testing assets, and providing CIO-managed model portfolios. Additionally, advisors can collaborate with WisdomTree’s team for trading, rebalancing, and tax optimization tasks.

The program helps advisors allocate more time to client-facing activities and improve their overall service. WisdomTree has also expanded its Portfolio Solutions team with the strategic hire of Samuel Rines, a Macro Strategist, to provide geopolitically risk-aware portfolios.

Finsum: These technologies allow advisors to deepen their relationships with clients by freeing up time and understanding interests.

State Street Global Advisors (SSGA) is introducing a new 'high growth' option within its Risk-Based ETF Model Portfolios, aiming to attract younger investors. The portfolio allocates 89% to growth assets and 11% to defensive assets. 

Kathleen Gallagher, SSGA managing director, highlights this move as a response to adviser demand for cost-effective portfolios catering to clients in their accumulation phase. The high growth model will be available on Praemium, Hub24, and Netwealth platforms.

This complements SSGA’s existing moderate, balanced, and growth portfolios, focusing on strategic asset allocation and risk management.

Finsum: This option could be a great opportunity to get model adoption among younger clientele 

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. 

ETFs have been on an ultra-high growth trajectory for over a decade now but at least part of that is being fueled by model portfolios. According to a Cerulli Associates report, ETFs are becoming a fundamental part of models. Asset managers and third-party strategist model providers now allocate about 54% to ETFs. 

Despite only 12% of financial adviser assets being held in practices primarily using model portfolios, Cerulli estimates that 24% are "model portfolio targets," reflecting client-specific customizations. BlackRock leads as the largest model provider with $84.3 billion in model assets, followed by Capital Group with $75.4 billion.

ETFs have surpassed mutual fund assets within models, and the trend is expected to continue as more products reach their three- and five-year track records, according to Matt Apkarian of Cerulli. The report also highlights the trend towards customization within models, combining ETFs with separately managed accounts to meet individual client needs.

Finsum: Technology augments the current financial offerings to ultimately drive innovation.