FINSUM

FINSUM

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الإثنين, 22 أيار 2023 13:48

Short-Term Fixed Income ETFs an Intriguing Option

2022 was one of the worst years in memory for fixed income amid raging inflation and a hawkish Federal Reserve. Yet, conditions are much more favorable for the asset class in 2023 given a slowing economy and decelerating inflation. In an article for TheStreet’s ETF Focus channel, David Dierking discusses why short-term fixed income ETFs are a compelling option.

While, it’s likely that the Fed is done raising rates for now, the resilient economy and labor market mean that rates are likely to stay ‘higher for longer’. This favors fixed income with shorter maturities as investors can take advantage of high yields.

ALready, we are seeing this manifest as short-term bond ETFs were the recipient of 21% of net bond ETF inflows in Q1, even though they only account for 8% of the fixed income universe by total assets. 

Additionally, many investors treat short-term bond ETFs as a cash equivalent given that they are extremely liquid, while paying generous yields. In fact, Fed policy is essentially encouraging this trade given the extremely inverted yield curve and rally in long-duration fixed income since March of this year. 


Finsum: Short-term fixed income ETFs are seeing major inflows this year and are an intriguing option in the current market environment.

الإثنين, 22 أيار 2023 13:47

FINRA means business

Seems the referee threw a flag.

Between January 2018 and December 2021, SW Financial, based in Melville, New York, and the co owner of the firm, Thomas Diamante, made material misrepresentations, neglecting to include material information linked with the sale of private placements offerings of pre-IPO securities, according to thinkadvisor.com. It was a duo violation; of FINRA rules and Reg Bi’s Disclosure Obligation as well.

According to Reg Bi’s Disclosure Obligation, it’s incumbent upon broker dealers – as well as those associated – to provide investor clients, “with full and fair written disclosure, prior to or at the time of a recommendation, of all material facts relating to conflicts of interest associated with the recommendation,” as spelled out by FINRA.   

Although it’s FINRA’s maiden expulsion, it’s not its first enforcement action evolving around Reg Bi, which has been around since 2020, according to the National Review.

By year’s end, FINRA pronounced, compliance examinations of 1,000 broker-dealers would be conducted.

الإثنين, 22 أيار 2023 13:35

Hey, Skip: you talk too much

Loose lips can, um, wreak havoc on ships.

In your branch, most advisors shouldn’t know squat about your plans; after all, they’re not buddies of yours, but competitors, according to thinkadvisor.com.

If you’re cutting the cord and bidding a non protocol firm adieu, it’s important for you to buckle down and closely abide by the prospective firm’s instructions.

In the world of missteps, a gaggle them can add significant difficulty to your transition:

Failing to Play by the Rules

Being Clueless About the Transfer Process

Taking Your Eye Off the Ball

Not Staying in Front of Clients Prior to Your Move

Meantime, you know the money? Well, follow it.

Probably not a badly conceived plan considering the consolidation on the part of Phoenix based Advisor’s Group of its network of eight brokerages into one translates into challenges, according to financialplanning.com. Those obstacles stem from the flow of thousands of financial advisors and assets work billions of dollars.

With more than 10,500 financial advisors and $490 billion in client assets, the firm will shift them to a rebranded company with a spanking new moniker, according to a report earlier this month by Moody's Investors Service.

 

الجمعة, 19 أيار 2023 10:46

Direct indexing and to the point

Your table’s ready, direct indexing. The food’s hot, the beverages refreshing cold.

What else would you expect, considering that in the financial industry, direct indexing’s all that and more – as in the next big thing, according to comparebrokers.co.

Who’s it idyllic for? Those who are calling it a day in the workforce. Under those circumstances, they can unload holdings that impact taxes the least.

If you want to separate yourself from your peers, direct indexing strategies could be your answer, according to advisorperspectives.com.

They can dispense tax effective ways to manage any cash windfalls that might be on the horizon among high net worth investors. Not only that, they can shore concentrated stock positions.

In a recent interview at IMPACT, Daniel Needham, president of Morningstar Wealth Management Solutions, said his firm considered direct indexing an “important investment option for advisors to be able to deliver great advice to their clients.

“That’s the primary reason we decided to enter the market,” said Needham. “We think that direct indexing is a good way for clients to be able to have their financial capital personalized, including their values, beliefs and preferences, as well as to be tax-managed for a lot of households. Tax management should happen for every household.”

الجمعة, 19 أيار 2023 10:44

In debt to whom?

Someone say doomsday scenario?

Or at least strongly imply it?

Democrat; Republican -- you can just shunt the ideologies aside. Both have a separate point of view with no end in sight in order to circumvent default as the government edges toward its so-called debt ceiling x-date, according to cnn.com. That, of course, is when the Treasury could find its pockets empty, meaning paying all government obligations would require extraordinary measures.

Okay, so while the odds still are relatively low that the government will default on its debt, Wall Street’s no fan of the impact the equity markets would feel in light of debates flashing no indications that the credits are anywhere near rolling.

Meantime, investors should devote rapt attention over the next few weeks and, as one expert suggests, stand poised to become “a bit more defensive,” according to cnbc.com.

At this point, at least, setting aside the fact the short term Treasurys have priced in reluctance, significant volatility isn’t necessarily in the cards as far as the markets are concerned.

“Congress was willing to play the game of chicken, but there were fewer members of Congress actually willing to crash the car,” said Betsey Stevenson, professor of public policy and economics at the University of Michigan.

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