Stash…Away we go?

It’s a great way to travel, apparently.

In order to offer a suite of diversified multi asset model portfolios, StashAway, Southeast Asia’s wealth management company, recently joined forces with Blackrock, the largest asset manager in the world, according to crowdfundinsider.com.

The portfolios were forged by Blackrock’s analytics and ETFs. StashAway will be their manager.

General Investing portfolios – through the StashAway app – abets the ability of investors to access diversified, multi asset ETF portfolios. The portfolios are optimized for risk adjusted returns over the long haul. Like a regular smorgasbord, investors have a choice of three different General Investment strategies.   

The StashAway supported General Investing portfolios dial in on a dual role: optimizing for long term risk adjusted returns while ensuring the risks are unrelenting. While doing the same, the Responsible Investing portfolio also optimizes for the effect of ESG.

And limited thinking? Ha; not around here. The third General Investing strategy, which is supported by BlackRock, is a new long term investment strategy. Its objective is handing the investor broader diversification.

“We’re excited StashAway’s launching portfolios powered by BlackRock’s analysis,” said Peter Loehnert, BlackRock head of ETFs and Index Investing APAC, according to hubbis.com. The partnership, he continued, will give more investors across Asia access to BlackRock’s insights and investment capabilities via StashAway’s platform. It will offer diversified and liquid ETFs as building blocks for portfolio construction, maximising the value of ETF investing.

Guardian Life Insurance recently announced that Talcott Resolution Life Insurance Company will reinsure about $7.4 billion in variable annuity benefits. Most of the contracts have guaranteed living withdrawal benefits and death benefit riders. The deal is expected to close by the end of the year. While Guardian will still be responsible for meeting contract obligations, advisors may have to explain to their clients why a lesser-known company is backing the guarantees. Guardian stated that it pursued this deal to focus its capital on exploring additional opportunities. Talcott only started after the Great Recession, when Hartford Financial Services wanted to separate from its large annuity business. The firm was aquired by Sixth Street last year. This deal is especially noteworthy as pressure from low returns has been pushing companies to find ways to distance themselves from some types of annuity businesses.

Finsum: To focus its capital on additional opportunities, Guardian Life picked Talcott Resolution Life to reinsure $7.4 Billion in variable annuities.

Kestra Investment Management recently announced the launch of its first two model portfolios series. The portfolios, which are exclusively designed for financial professionals associated with Kestra, are structured to maximize opportunities for clients, by providing options based on a client’s risk preference, desire for growth, and tax sensitivity. Both portfolio series have tax-aware versions, are low-cost, and flexible to fit a wide range of client needs. The Strategic Series has a long-term focus with multiple risk profiles. It is designed to be an efficient, streamlined solution with low turnover while still maintaining exposure to potential economic growth. The Dynamic Series is more active and has a higher level of trading activity for investors looking to benefit from changes in economic and market trends. The Kestra Investment Management team will manage the model portfolios. The team will analyze potential investments, use a rigorous due diligence process to select the best-suited funds, monitor portfolio allocations to opportunistically make changes, and regularly rebalance those allocations to keep each portfolio model aligned with its goals.

Finsum: Kestra launched two model portfolio series, one with low turnover and another with a higher level of trading.

The advent of digital advice has not only made investing easier but has also allowed client interactions to become more seamless. With more client interactions moving online, do online content and advice still put a client's best interest first? That’s a question the SEC, industry lawyers, and other regulators are contemplating. While online firms such as Robinhood came under scrutiny for gamifying investor behavior, something as simple as an investment calculator on an advisor website can be construed as a recommendation. Last August, the SEC issued a request for comment about broker-dealers’ and investment advisors’ digital engagement practices. Keith Kessel, a senior principal consultant at ACA Group, told Financial Advisor IQ that the SEC “is trying to ascertain in what set of scenarios would a recommendation or solicitation exist versus what are those engagement practices that are outside of the purview of the scope of the solicitation of the suitability rule and/or Regulation Best Interest regulation duty as such.” He also noted that the SEC’s request for comment “emphasizes the regulator’s concern about the blurring of the lines between engagement and advice.”

Finsum: As more client interactions occur online, the SEC is trying to determine what constitutes advice and what constitutes engagement.

According to a global two-phase survey from Morningstar Indexes and Sustainalytics, asset owners are not, by and large, implementing ESG factors in their portfolios. The Voice of the Asset Owner survey asked 500 global asset owners in 11 countries their thoughts on ESG. Survey findings revealed that only 29% of asset owners reported that they consider ESG factors for at least half their holdings. The reason for the low figure was attributed to concern over the impact on returns, a lack of available products, and the reluctance of both clients and stakeholders. However, the survey also showed that 85% of asset owners believe ESG factors are material to investment policy, while 70% said that ESG factors have become more material over the past five years. Asset owners that participated in the survey included OCIOs, family offices and sovereign wealth funds, pension funds, and insurance providers. Two-thirds of the respondents noted that the quality of ESG data, indexes, ratings, and tools have improved. However, about half stated that data and ratings would stand to benefit from improvements in accuracy, timeliness, and greater objectivity.

Finsum: A recent survey revealed that while many asset owners believe ESG factors are material to investment policy, only 29% consider ESG factors for at least half their holdings.