In an article for InvestmentNews, Palav Ghosh discussed the growth in capital allocated to alternative investments by global asset managers. There was a 10% increase from 2021’s $130 billion to $144 billion in 2022 according to a report from Vidrio Financial.

Some of the largest destinations for this capital were private equity and venture capital which accounted for $61.6 billion. This was a slight drop off from $64 billion in 2021 albeit not surprising given the struggles of these two asset classes. However, inflows into credit and real estate remained the same at $27 billion.

Interestingly, there was a more than 100% increase of inflows into hedge funds which went from $8 billion in 2021 to $16.6 billion in 2022. Inflows into infrastructure and real assets also slightly increased to $7.3 billion and $4.9 billion, respectively.

Some of the top allocators to alternative investments were the New York State Common Retirement Fund, the State of Wisconsin Investment Board, and the California State Teachers Retirement System.

Overall, allocators are moving away from the typical 60/40 model and closer to a balanced mix of private and public investments.

Finsum: Allocators are increasing exposure to alternative investments. This isn’t surprising given the volatility for stocks and bonds over the past year. 

In an article for SmartAsset, Rebecca Lake, CEPF, discussed some networking strategies that advisors should implement to grow their business. First, networking will ensure that advisors have a pipeline of future opportunities. 

Networking is also effective to help you establish a reputation in your community and can help you connect with people who could be potential clients. It’s especially important as word of mouth remains the primary way that people choose their advisors. 

The simplest step is to join a professional association that is national or locally based. These will regularly put you in face-to-face contact with people in your industry and potential clients in an informal, relaxed setting. Local organizations will also give you the opportunity to participate in community events which can provide organic opportunities to form relationships with people in your community.  

Another important piece for advisors is to grow a presence on social media. It can help display your personality and thinking on a deeper level, and it can help you find potential clients within your niche. And, you can also use social media to try to understand whether or not these prospective clients are a good fit for your practice based on their digital footprint.

Finsum: Networking is an integral part of success for any financial advisor as it will ensure that you have a pipeline of potential clients.

The financial industry’s not just casually tweaking its monthly expense reports and wolfing down popcorn, watching as things unfold, you know.

On contraire. As it sachets toward holistic wealth management and “goal based” planning, the industry recognizes the importance of acquiescing asset management to third party strategists has mounted, according to wealthmanagement.com.

Meantime, the need to accomplish that mission is spiraling. While advisors within larger firms already can access model portfolios, now, additional options are available to their counterparts.

And, hey, model portfolios tout more than a few advantages.

For example, there’s ease of use. “Model portfolios can be used as a complete solution for investors that prefer a hands-off approach to achieving their investing objectives,” said Colby McFadden, CEO of Quiver Financial, an Investment Advisory Firm in San Clemente California, according to forbes.com.

Another: diversification. The need for a thick wad of money to pluck down on multiple asset classes? No need, said Mark Kennedy, president of Kennedy Wealth Management in Calabasas, Calf. Some can have a minimum as low as $10,000 to start.”

Recent volatility in the financial market? Sure enough. Pressure on spreads? Two for two. 

Yet, the medium term outlook for fixed income hasn’t deviated and remains relatively high, according to sageadvisory.com.

Hearty returns in core fixed come are fueled by factors such as attractive yield carry, a weak growth picture and the wraps put on the Fed cycle

And is the subject of taxes ever far behind? 

Prompted by a change in tax laws, last month, investors flocked to park their dollars in fixed income funds, according to ithought.co.in. That said, merit played no role.

In 2023, investors should find out, for example, whether the time is right to put money in fixed income. That would be a yes, the site stated. Equity, gold, real estate or fixed income are the options investors have. For equity in so much as performance is concerned, 2023 will be rough and tumble. On the other hand, participation will score big. The best performing asset of FY22-23’s gold. For investors, rather than dwelling on what went down last year, all eyes should be on taking stock of performance down the line.

Model portfolios continue to be a major beneficiary of current volatility and uncertainty as evidenced by Charles Schwab seeing $4.6 billion in inflows to its bond ETF according to an article by Bloomberg’s Carly Wanna.

These inflows are being attributed to adjustments made by a model portfolio and are offered by many large asset managers. Currently, there is no firm estimate on the size of the model portfolio industry, but manu speculate that trillions are managed through them. And, they are offered by the largest asset managers including Vanguard and Blackrock. 

But, the best indication of their size and influence is the massive inflows and outflows from ETFs which tends to happen at the beginning or end of quarters. Additionally, it’s easy to match the inflows and outflows from various ETFs. In this case, the model portfolio seems to be reaching for increased yield as it moves out of Treasuries and into lower-rated corporate debt. 

Overall, model portfolios are booming due to the strategy providing the benefits of active management with lower costs and increased transparency.

Finsum: Model portfolios are having an impact on Wall Street as evidenced by the huge inflows into Schwab’s bond ETF.