Fidelity Investments is expanding its alternative offerings with a new private credit fund. According to Ignites, the company registered the Fidelity Private Credit Fund as a ‘40-Act fund structured as a perpetual-term business development company. The fund will be managed by Fidelity Diversifying Solutions, the company’s new alternative unit. The fund, which will focus on lending to smaller firms, is looking to raise between $100 million and $1 billion initially. The fund will allow investors who don’t necessarily meet the requirements needed to invest in private equity, venture capital, or hedge funds. However, it does require them to have a gross income of $70,000 per year or a net worth of $250,000. According to the fund’s prospectus, net fees for the fund will range from 4.89% for institutional shares to 5.74% for S-class shares. It will also have a performance fee of 12.5% each quarter exceeding 5% growth and 12.5% of cumulative realized capital gains from inception through each calendar year.

Finsum:Fidelity is expected to launch a new private credit fund for investors who typically don’t meet the requirements needed to invest in private equity or hedge funds.

JPMorgan Chase has partnered with software firm Datamaran to create a data-analysis tool for clients to gauge the ESG risks facing portfolio companies and the ESG risks that these assets pose to the world around them. This is a concept known as double materiality. While the concept is already built into EU ESG regulations, this would be the first time it is used in the U.S. The new tool is called ESG Discovery. Jean Xavier Hecker, who is the Paris-based co-head of EMEA ESG research at JPMorgan and the designer of the tool, stated, “Double materiality is the only way to think about ESG in a way that is both forward-looking and comprehensive.” The tool, which is now available to JPMorgan clients, will use artificial intelligence to compile data from corporate disclosures, regulations, and online media. It is important to note that it won’t provide an ESG rating or score. Its focus is on unpacking individual ESG drivers.

Finsum:JPMorgan has partnered with software firm Datamaran to create a tool that uses artificial intelligence to evaluate ESG risks.

Before the pandemic, advisors and their staff were enjoying elevated compensation levels. But once the pandemic occurred, advisors suddenly needed to take stock of the financial health of their businesses. While the market downturn in 2020 didn’t last long, its effects led firms to become more conservative with their expenses. The continued volatility in the market resulted in firms looking to increase profit margins and aggressively cut costs. Rent and office expenses were the first to be cut, however, the largest expense by a considerable margin was non-owner compensation. According to an article in City Wire USA written by Damian Lo Basso, managing partner, and CFO at Journey Strategic Wealth, the years 2020 and 2021 were the first years since the financial crisis that many firms kept salaries and bonuses flat. In addition, some firms are now tying up to 50% of team members’ bonuses to overall firm performance.

Finsum: Due to the effects of the pandemic and ongoing uncertainty in the market, advisor teams are seeing their compensation being tied to firm performance.

Franklin Templeton has partnered with Futu Securities International, a Hong Kong-regulated operation of digital brokerage Futu, to offer three risk-based model portfolios. The two companies have worked together since 2019 when Futu rolled out its mutual fund business to help expand its client base. The new model portfolios will help the China-based company strengthen its strategic relationship with Franklin Templeton. The model portfolios will have various risk levels to fulfill the client's needs and risk appetites. Futu is leading the brokerage industry in Hong Kong with a high market penetration rate. According to the company, its average user spends 1.5 hours per day on the Futubull app. The company also claims that its Hong Kong users accounted for more than 40% of Hong Kong’s adult population.

Finsum:Franklin Templeton is renewing its partnership with Hong Kong-based Futu Securities with the launch of three risk-based model portfolios.

When it comes to September, stocks have a track record of not exactly rocking – much less rolling. For the 30 year period, average returns chime in at -0.34% and -0.26% for the 15-year period, according to forbes.com. The five year period: -0.92%.

And it just keeps getting better with the month in a category of its own as a period when the market held down the rear, drooping on average in every time period.

Now, consider that along with the fact that, already, the year, stoked by factors such as flaming inflation, bulging interest rates and a recession keeping nearly everyone on edge has, you might say, been crackling with volatility. So, how could investors react? Why, they might go shopping for a placeholder for their considerable assets.

Fed chair Jerome Powell, addressing this year’s Jackson Hole Economic Symposium, acknowledged that to stave off growth, it’s probable rates will remain on the high side, not exactly comforting to households and businesses, according to talkmarkets.com.

Trying to read the tea leaves, there are market watchers who believe Powell means he’s no longer homed in on a soft landing. Rather, his focus might on a “growth recession,” as economists characterize it. A growth recession, of course, loosely is marked as a period when the economy’s headed north, yet so slowly that it’s putting a crimp in the volume of available jobs.

Creating a model portfolio isn’t exactly like twisting open a water faucet, you know. The old noggin comes in plenty handy. After all, effective investing’s means committing to the choices among a range of investment tools that will yield results, according to forbes.com.

And they’re made of strong stuff, with the gravitas to turn a financial future rife with uncertainty into a secure one. A great starting point: putting together a model portfolio, the site continued.

Substantial discussion’s weaved into creating the portfolio, which consists of a gaggle of diverse assets. It also dispenses the opportunity to leverage diversification as a hedge against your risks.

You’re not only homing in on your financial objectives down the road but must be positioned to address any important immediate needs. Not only that, when it comes to your expenses, it’s essential to have enough liquidity to abet your ability to manage it.  

Well managed stock or “equity” funds pave the way to the best chance for a long term stock market experience on a sustained basis for most people, according to yourarticlelibrary.com. A generally embraced idea: the younger you are the more sprinkled with to equity stocks your portfolio should be.

ESGs? So called Active driven agendas? Two peas in a pod? Um, yep; that is, if you ask Indiana Attorney General Todd Rokita, according to foxnews.com.

Rokita contended that state law places a roadblock in the ability of ESG to impact investments by state government employee pension funds. He furthermore states that BlackRock, one of the world’s largest investment funds, potentially has “run afoul: of state and federal antitrust laws. How? By leveraging ESG in its investments decisions. The company also promotes its "firm-wide commitment to integrate ESG."

He argued that the Indiana Public Retirement System is required to invest the pensions of citizens "with care, skill, prudence and diligence," in an advisory opinion late last month. He also went on to allege that since ESG investments stem from political instead of financial interests, it’s a legal no no for the INPRS to make investments with ESG guidelines in mind.

Looking ahead to future ESSH campaigns, boards would be savvy to expect a settlement – or for activists to prevail – and not withdraw or a failed activist initiative, based on research from diligent.com.

While there was a drop off in the volume of activism activity between 2020 and last year, 13% of the campaigns last year struck gold. In 2020, it stood at 11%. It was indicative of a shift in corporate commitments to ESG, the site continued.

et’s see: an IRS audit. Or this: your taxes are hightailing it north.

Then there’s the old reliable: the volatility of the financial markets.

Ah, yes. Bum, bum and, um, bummer of all.

That said, on the bright side, to leverage the dividends of tax loss harvesting, there’s direct indexing, according to advisorperspective.com.

And what’s with the gold dust direct indexing boasts in light of a topsy turvy market? Well, the investor owns the individual securities rather than a commingled fund, so they take ownership of any losses absorbed on receding stocks, the site continued. So, when it comes to offsetting gains, the investor can tap those setbacks. And, presto, that can go quite a way in paring back the tax bill of an investor.

But it’s not all tinsel town and balloons. On one hand, says experts, fees and accounts minimums might be heading south, on the other, it could be that direct indexing’s will cut a deeper swatch in your wallet and; yes, isn’t there always more: might be more difficult to deal with than passive investing, according to cnbc.com.

Category: Eq: Dividends, 

Keywords: direct indexing, financial... etc.

According to the SEC’s draft strategic plan for the next four years, the agency plans on shifting its enforcement focus regarding Reg BI to “making a recommendation.” The SEC’s Strategic Plan for 2022-2026 states that the agency intends to bring cases that matter to “all parts of the SEC’s mission.” This includes failure to act in a retail customer’s best interests when making a recommendation, among other items. Kurt Gottschall, a partner in Haynes Boone, and a former director of the SEC’s Denver Regional Office told ThinkAdvisor that the language “indicates the SEC is ready to move beyond basic compliance and disclosure obligations to scrutinize the placement of retail investors’ funds in advisory versus brokerage accounts, whether complex or risky products were offered to those investors, and registered representatives’ consideration of costs.”

Finsum:Based on the language in the SEC’s four-year strategic plan, advisors and Broker-dealers will need to pay more attention to compensation arrangements and product placements.

According to a recent report by Fitch Ratings, U.S. insurers are expected to continue to increase their fixed-income ETF holdings. In December, New York introduced new guidelines that allowed a fixed income ETF to receive bond-like capital treatment if the ETF is rated by a nationally recognized statistical rating organization. However, if rated, an ETF can receive this treatment only if it is invested in fixed income securities and cash, is passively managed, and has at least $1 billion in assets under management, among other criteria. So far, Fitch has rated 10 fixed-income ETFs from VanEck, Vanguard, and Invesco. Insurers have previously sought to increase their ETF holdings due to a mix of diversification, increased liquidity, and the ability to adjust overall portfolio allocations. According to SNL data, ETF holdings at insurers jumped from $3 billion in 2016 to $9.8 billion at the end of 2021.

Finsum:Since New York introduced new guidelines that allowed a fixed income ETF to receive bond-like capital treatment, insurers have been increasing their fixed income ETF holdings.