FINSUM

الإثنين, 13 حزيران/يونيو 2022 11:04

Volatility Pros At Hedge Funds Moving Digital

Hedge funds are one of the leading experts in volatility management, which is exactly why their latest moves might surprise people as they move into crypto and other digital assets. According to a report from PwC the number of hedge funds investing in digital assets is up to a third, and 11% higher than the previous year. It’s hedge funds' specialty and their namesake that they can utilize similar tactics in traditional markets in digital ones to mitigate risk in their digital exposure through derivatives trading. Specifically short positions are extremely useful in the highly volatile crypto markets. Over three-fifths of crypto specializing hedge funds are using these hedging strategies in their portfolio, and this has allowed them to edge out over traditional bitcoin returns. Another surprising finding in the report is that a vast majority of crypto hedge funds have high-net-worth clients and family office investors.

Finsum: Crypto hedging strategies might just be the key to unlocking the full power o digital assets.

Published in Economy

الجمعة, 10 حزيران/يونيو 2022 09:53

PIMCO Building on Active Fixed Income Options

PIMCO is a leader not only in the management of fixed income products but in the research around them as well. They are adding another active Fixed Income Fund to their suite of options for income investors. The Senior Loan Active Exchange-Traded Fund will give exposure to floating rates in senior loan markets which will seek to minimize the impact of rising rates on portfolios. PIMCO says their superior credit analyst team will help them mitigate and manage credit risk to better hit investor targets. PIMCOs active taxable options for fixed income are growing, and this addition nestles nicely in between their BOND fund and their short duration MINT fund.

Finsum: Active taxable fixed income has a great edge in these macro markets and funds are smart to capitalize because the gyrations are easier to spot.

Published in Economy

الجمعة, 10 حزيران/يونيو 2022 09:45

Bond Buy Back Time

Bond outflows are starting to slow as a response to rising rates and lower prices. The Fed’s hawkish policy stance has been elevating prices but now they are relatively attractive given the return. Previously bond prices were held purely as a safety net because yields on government debt generated no income, but rising rates are making them a competitive income option for those investors. In addition, more investors are looking for a way to mitigate volatility in these trying times, which has them shifting toward bonds and out of high-risk assets. Additionally, a whole new generation of investors are much more comfortable with ETFs and are thus turning to bond funds as their source of security.

Finsum: Bonds could make a comeback if inflows turn around they could be bottoming out price-wise.

Published in Economy

الخميس, 09 حزيران/يونيو 2022 09:55

Around awhile, but Direct Indexing boasts different look

While not new, direct indexing’s come a long way. Catch was, it primarily was a tool of larger investors in light of its cost and daunting technology, according to smartasset.com.

But with those hurdles easing, the site continued, the time might be right to contemplate a few things it brings to the table. For one thing, gains on stocks with an uptick in value can be deferred.

Another juicy nugget: tax efficiency, according to barrons.com. Direct indexing’s viewed by advisors as a potentially game changing tool for their firms. Powered by computer algorithms, with direct indexing, advisors can cherry pick sales of specific shares that have headed south in value.

“Tax-loss harvesting is incredibly important now and may be even more so if tax rates go higher,” noted Jim Hagedorn, managing partner at Chicago Partners. In 2019, the company began offering direct indexing.

But there are catches.

For example, active management’s a prerequisite for direct investing portfolios while it’s mostly hands off with index mutual funds and ETFs or exchange traded funds, according to smartasset.com.

And this: tracking performance can be tricky. Investors in ETF and mutual funds receive relatively easy to digest statements with a few ticker symbols to track. It’s not so simple with direct indexing. A statement might be rife with individual stocks, which could stretch into the hundreds, the site stated.

Published in Economy

الخميس, 09 حزيران/يونيو 2022 09:47

ESG products might be losing their luster

According to reports, it appears the use of ESG products might no longer be in vogue.

A ballooning percentage of advisors are indicating their plans to reel back the recommendations of the investments, according to a recently published survey, reported investmentnews.com.

Of over a third of more than 400 advisors indicated they include ESG in the portfolio of clients in a Financial Planning Association survey. While that figure’s been on the uptick but has essentially stagnated over the past four years.

In the next 12 months, ESG use could turn downward, according to the 2022 Trends in Investing Survey, conducted by the Journal of Financial Planning and the Financial Planning Association, the leading membership organization for Certified Financial Planner™ professionals, reported yahoo.com.

ESG investing aligns individual principles, purpose, and values with the virtuous greater good of the human condition and the Earth. Sometimes such missions and esteemed purposes come with higher investment costs and slightly trimmed investing returns, said Dr. Preston Cherry, CFT-I, CFP-(I wouldn’t use these, but not sure about your policy), practitioner editor of the Journal of Financial Planning.

"If ESG investing has reached an inflection point, it could be due to several factors, including higher fees, lower performance, or a lack of ESG impact and index differentiation that inspires investment."

Published in Economy