A new generation of technology is at our fingertips, and whether that's Netflix or Amazon people want the technology to service them now more than ever. Index tracking funds are really the cable box in the modern world and investors want a more tailored experience that only custom indexing can offer. Partners at Fidelity are saying that a hyper-customized multi asset portfolio is really the future, and given how popular trends like ESG are becoming, advisors are really needing better tools to attract and maintain clientele. Custom indexing can hit a multitude of demands investors want and also drive home a better fee for their workload as compared to traditional ETFs.

FINSUM: The world of a custom index, where stocks can be added and dropped for any reason is here, and it's probably on a mobile platform soon.

2021 is wrapping up which means we will have annual launch numbers for different types of ETFs. One area of surging growth is active fixed income where there were 15 new launches this year, this is quite an historic change from over 5 years ago when there were a meager 7 new funds launched. Overall the growth is staggering because a decade ago there were only about 25 active fixed income funds and there are well over 175 today. Historically low yields around the globe and significant interest rates have many investors pouring over $137 billion into active fixed income funds, as they rely on pickers to outperform the stock market. A variety of quantitative funds are popping up in fixed income leading to smart beta strategies which can also drive better returns.

FINSUM: Active fixed incomes growth has stayed stable the last five years but the explosion is no doubt a retort to the global macro factors facing fixed income managers. 

Think Advisor has put out a piece outlining pending changes to IRAs that are making their way through the legislative process. Importantly, some of these have bipartisan support and seem likely to make it into law. The biggest changes in the cards have to do with Roth IRA conversions. A lot has been made in the press about the mega rich doing massive IRA to Roth IRA conversions and thus congress is set to take action. Conversion between the two would be banned for those with incomes over $400,000.

FINSUM: Advisors should start helping clients plan for this change. However, there is a massive caveat here: the current congressional plan calls for this loophole to close, but only starting ten years from now!

Crypto went on a wild ride this year as regulators from the globe sent the price in terms of dollars on a rollercoaster. However, some individuals might need to minimize their tax burden and crypto could provide some outs. If not all of your coins took off or better yet if you jumped in on Doge coin at the wrong time now is the time to sell off some coin and realize the gain for some optimal tax loss harvesting. Investors can also take advantage of the fact that wash rules don’t apply to Crypto until 2023, which means you can buy and sell your coins within a 30 day period to help minimize your tax contribution. Finally, investors can utilize a donation of cryptos above their fair market value to write off a charitable donation from your final tax bill.

FINSUM: Cryptos up and down roller coaster ride gives investors holding it an advantage in tax loss harvesting, and particularly when it comes to capitalizing on the Wash rules applicability.

Investors are doubling down efforts to carry out specific reviews of companies ESG compliance, as a new survey found that 72% carry out reviews compared to a meager 32% a couple of years ago. Some stocks are standing out from the crowd as good ESG investments moving forward. Microsoft stands out by their detailed yearly reports that will stand up to scrutiny and their pledges to reduce their carbon footprint seem very plausible. The next big stock is Nvidia which has one of the highest ESG ratings in the chip manufacturing industry and GPU and other chip demand will only grow moving forward. Dividend darling Coca-Cola should also be on investor’s radar as it has a long positive history of supporting sustainable initiatives. Rounding out the best picks is American Express which has an AA rating on ESG efforts putting it in the industry's 93 percentile.

FINSUM: Stock pickers should look out for consistent ESG benchmarks as this will likely lead to outperformance moving forward.