Seems there’s plenty of affection for alternatives these days. Yeah; endearing, right? More and more people are holding alternatives closely, maybe, warmly, even, a vivid reflection of an ability to access a deep variety of products like those – not to mention the supporting technology, according to thinkadvisor.com.

Looking volatility squarely in the kisser, advisors are putting the pedal to the metal when it comes to turning to private funds and alternative investments, according to a bi annual survey of 400 financial advisors reported in October by Broadridge Financial Solutions, as reported by prnewswire.com. "Advisors are acutely feeling the need for diversification in their clients' portfolios but remain dissatisfied with the private fund and alternative investment products and resources available to them, largely due to limited availability and restrictive options. Asset managers are not adequately meeting financial advisors' needs, despite an understandable surge in demand against the backdrop of volatile public markets," said Matthew Schiffman, principal of Distribution Insight at Broadridge Financial Solutions. 

"We see this as a strong, long-term opportunity for asset managers to showcase their value by providing product options that meet the growing demand for alternative investments among retail investors."

You could say when it comes to blue plate specials, ESGs are on the menu.  Make it two. Take a look at the environment. The GOP’s gearing up and, almost inevitably, when the new year hits, a gaggle of House committees will kick off hearings to deal with what some members of the grand party see as the threat ESG poses to a host of issues: investor returns, the country’s oil and gas industry, energy security, universal equal opportunity, according to forbes.com.  

And, hey, stick around. More very well might be lurking around the corner. Then there’s Europe’s stake. With assets managers taking in fresh regulatory proposals that could send the Europe’s largest ESG fund category into a tailspin, there’s a plan by its markets watchdog, ESMA, according to linkedin.com. The upshot of the plan: set quantifiable ESG and sustainable investing standards, which is compelling portfolio managers to think twice about the way they design and market an ESG fund class – Article 8.

The model target segment, it seems, get around. Even without an Uber app. It goes like this: the segment represents 26% of industry advisor asset, with advisors checking in at 46% and advisory practices, 61%, according to fundssociety.com. Yep; spreading the wealth, so to speak.

So, what’s the draw? Well…if you have to ask. That said, if you do, tax efficiency’s among the headline requests for financial advisors deep diving the upside of the portfolios. Particularly noteworthy; 60% of model providers report receiving at least some requests from advisors surrounding this objective.

“This aligns with a broader industry trend regarding the importance of effective tax management as a way to add value to client portfolios,” says Matt Apkarian, associate director. “Advisors want to be able to effectively tax-loss harvest, and to be able to reduce the tax impact of changing investment solutions.”

What’s more, the popularity of model portfolio’s isn’t hightailing it out of doge anytime soon. Along those lines, the clients of advisors should keep an eye on the mail. Eighty two will be the recipients of targeted or comprehensive financial planning services by next year, according to napa-net.org.

Tidal Financial Group recently announced the launch of the Senior Secured Credit Opportunities ETF (SECD), its first actively managed credit ETF. The fund, which is managed by Gateway Credit Partners seeks to generate consistent income and preserve capital by investing in a combination of first-lien senior secured loans and secured bonds to businesses operating in North America. Gateway is a value-based credit manager that focuses on capturing fundamental and technical inefficiencies in the leveraged loan and high-yield bond market. The firm focuses on generating true alpha which they define as yield per turn of leverage significantly greater than their representative indices. It believes a “size arbitrage” exists in credit markets as rating agency models can over-emphasize size vs credit fundamentals. Tim Gramatovich founder of Gateway had this to say about the ETF launch, “At over $3 trillion, the US loan and high-yield bond markets offer investors a tremendous opportunity to generate yield. We believe SECD fills a much-needed gap in the actively managed corporate credit space particularly as it relates to the loan market.”

Finsum:Tidal Financial Group recently launched an actively managed credit ETF that aims to take advantage of higher yields in the loan market.

With bond mutual funds experiencing record losses this year, many investors are headed for the exit. But most are not leaving fixed income altogether, they’re just swapping mutual funds for ETFs. The main reason is taxes. Many investors are selling positions in bond funds and putting the cash into similar ETFs to harvest tax losses. According to The Wall Street Journal, “This year is shaping up to be the biggest 'wrapper swap' on record.” About $454 billion has been pulled from bond mutual funds, while $157 billion has flowed into bond ETFs through the end of October. According to macro research firm Strategas, it would be the largest net annual swap to ETFs by a wide margin.” Todd Sohn, ETF strategist at Strategas stated, “The Fed is at its most aggressive in 40 years. Along with inflation, that has absolutely crushed bonds. It’s set off the acceleration of wrapper swapping that we have seen in equities for a while. Now we’re finally getting it in bonds.” Many of these swappers are also taking their money out of mutual funds that hold riskier bonds and putting them into safer Treasury ETFs.

Finsum:With the bond market experiencing its worst year since 1975, bond investors are trading mutual funds for ETFs at a record pace.