Based on a recent report from the Alternative Credit Council, the private credit affiliate of the Alternative Investment Management Association, private credit managers remain bullish on their business prospects heading into the new year. In fact, more than 80 percent of global private credit managers are either bullish or cautiously optimistic about the market’s prospects over the next 12 months. The report was based on a survey of 54 private credit managers with $805 billion in combined assets. The optimism comes at a time when more investors are looking to increase their allocations to private credit next year. This was highlighted by a recent survey by Ernst & Young. According to the report, many private credit managers are taking advantage of this tailwind by expanding into new geographic locations. The report said, “Much of this growth is being led by the private equity market, which continues to spearhead private credit’s expansion into new markets. This development is likely to prove valuable for the European and Asian economies as they seek to diversify the sources of financing available to borrowers.”

Finsum:Due to an increase in interest from investors, private credit managers are optimistic about their business prospects heading into the new year. 

Bond. James B….. Well, no, not exactly. However, for the first time in 10 years, investors are gaining value in bonds,  according to JPMorgan Chase & Co.’s Bob Michele, as quoted on Bloomberg, reported zacks.com. That’s unfolding in the light of higher interest rates making fixed income more of a financial boon.

“Every wealth-management platform in JPMorgan, every institutional client -- they’re coming to us, they’re putting money in bonds,” Michele told host David Westin. “Bonds are back.” iShares 1-3 Year Treasury Bond ETF (SHY Quick QuoteSHY – Free is off 5.2% this year while the S&P 500 has lost about 17.2%.

Someone say double duty? They address steepling interest rates as well as yielding healthy current income. In the midst of a tumultuous year, this ETF’s proven relatively resilient.

For those who feast on bonds, a handful of potentially winning ETF strategies are highlighted below:

• High-yield interest-hedged ETFs
• ProShares High Yield-Interest Rate Hedged ETF
• Convertible Bond ETFs
• First Trust SSI Strategic Convertible Securities ETF
• Senior Loan ETFs
• TIPS ETFs
• Floating Rate Bond ETFs
• Short-Term Cash-Like ETFs

Meantime, for the period concluding November 30, 2022, the distribution amounts per security (the "Distributions") for certain of its exchange traded funds, recently was announced by Horizons ETFs Management (Canada) Inc., according to finance.yahoo.com.

Want to mix with the big boys, eh? Well, you can partake in an approach to investing that, previously, institutional or ultra-high-net-worth investors alone had access to, according to Kiplinger.com.

Today, more investment firms offer “personalized” or “direct” indexing to Main Street investors. Typically, the trend, controversial though it might be, compels buying and trading stocks directly – a mirror image of an index. With cost conscious index investors squarely on their radar,  smart supercomputer programs and the ability to buy fractions of shares, at least three firms—Fidelity, Schwab and Wealthfront—are repackaging the service, a climate aided by no commission trading.

Meantime, earlier this month, as part of an industry trend, Morningstar became the latest company to launch a direct indexing investment offering, according to thinkadvisor.com.

And in the landscape of firsts, Morningstar Direct Indexing’s has its mojo; it’s one of Morningstar Wealth’s maiden major product launches. The indicated that, to begin with, direct indexing portfolios will be available the Morningstar Wealth Platform.

“Advisors are looking for ways to meet client interest in new investment options, particularly those that allow customization and personalization,” Daniel Needham, Morningstar Wealth president, said in a statement.

According to Richard Best, Head of the Division of Exams at the Securities and Exchange Commission, Regulation Best Interest and the Advisers Act fiduciary duty remains a top priority for 2023 exams. While speaking at the SEC’s National Compliance Seminar, Best said that standards of conduct such as Reg BI and the fiduciary duty “remain top of mind for us.” Best told compliance officers that the Division of Exams is “focused on how broker-dealers and advisors satisfy their obligations under Reg BI and the Advisers Act fiduciary standard to act in the best interest of retail investors and not to place their own interests ahead of retail investors interest.” The exam division publishes an annual priorities letter each year, with the 2023 priorities expected to be issued early next year. The three areas of focus will be ESG-focused investing, private funds, and standards of conduct. For ESG, the SEC will look into whether advisors are accurately disclosing their ESG investing approaches and have implemented policies to prevent violations of federal securities laws.

Finsum:With exam priorities expected to be issued early next year, the SEC has made Regulation Best Interest and the Advisers Act fiduciary duty a top priority for 2023 exams.

Fintech firm WBI and ETF provider Pacer recently announced a strategic partnership to transform how financial advisors interact with clients to personalize and implement model portfolios. WBI offers investment technology that optimizes multi-manager portfolios that target loss or return. The platform’s interactive toolkit takes inputs from the client and assistance from an advisor and establishes client benchmarks for loss and return. The imbedded invest-tech then optimizes a portfolio to meet the client’s targets. Advisors can instantly customize the portfolio to position the client for success. Pacer is a well-known ETF firm that focuses on strategy-driven, rules-based ETFs. The two firms will work together to promote the targeted loss portfolios of WBI’s technology platform. WBI and Pacer will also look for other opportunities to partner on model construction. Matt Schreiber, Co-CEO at WBI had this to say about the partnership, "WBI is excited to work with Pacer. Their rules-based ETF offerings seek to produce strong risk-adjusted returns which are favored by the platform’s optimization engine. This partnership allows both parties to build on the momentum around our innovative products and shared mission to help improve investor outcomes."

Finsum:Fintech firm WBI and ETF provider Pacer are joining forces to promote WBI’s targeted loss portfolios that advisers can construct for clients.