FINSUM
Don’t Worry About an ESG Stock Bubble
(San Francisco)
Many investors are worried that the huge growth in ESG assets might be causing a bubble in the most common stocks in ESG funds. However, the reality is that they are not. According to Bridgewater Associates: “The shift to ESG appears to be still in its early innings. Investor positioning in sustainable equities is not yet overextended … The US ESG index looks very similar to the aggregate market, and much less frothy than stocks that have been most popular with retail investors where we think valuations are most stretched”.
FINSUM: In other words, despite all the hype about ESG asset growth, overall valuations are in line with the broader market so there is no specific risk to ESG funds.
Another Big Tax Risk for the Wealthy Just Arrived
(Washington)
Most advisor attention as it regards Biden’s tax plan has been about increased capital gains taxes and the unwinding of the “step-up basis” in the inheritance of assets. However, there is another major risk and complication on the horizon. That has to do with state level inheritance laws and how they interact with Biden’s plan. The federal government has no formal inheritance tax, but rather an estate tax. States, by contrast, often have inheritance taxes. The big difference between the two is that the estate tax is levied on the estate itself, whereas inheritance taxes are levied on the beneficiaries. That means that each individual is subject to a different level of taxes based on their income.
FINSUM: To be clear, the implications of this are quite large for HNW individuals, as they could face much higher federal estate taxes in addition to high state level inheritance taxes.
New Regulations Mean Funds are Better Than Stocks
(Washington)
China has been a no-brainer for any diverse portfolio and quite frankly continues to be one…see the full story on our partner Magnifi’s site.
Summer Bond Market Flummoxes Investors
(New York)
The summer bond market has a pretty predictable summer pattern. Normally…see the full story on our partner Magnifi’s site.
A Huge Influx of Cash About to Hit ESG
(New York)
Federal workers will now have the option to invest their retirement and savings accounts directly into…see the full story on our partner Magnifi’s site.