Did you know that most advisors spend 5.5 hours per week handling investment management related tasks like searching for funds? That stat comes from Kitces.com and does a good job highlighting what has become an increasingly difficult problem for advisors: how to find the right funds when there is an ever-increasing ocean of options, including many that look very similar. Between screeners with limited criteria (I want “value ESG”, not just “value”) and the pain of cross-asset class searches, finding funds has increasingly become a real quagmire for time and effort. Imagine if you could have three extra hours per week to focus on new client acquisition instead of cycling through drop-down menus trying to find funds? Well, a company called Magnifi has a great new tool to help you do just that. For example, international stocks are getting some attention from Wall Street analysts right now because of their favorable valuations versus US stocks. However, finding the right international funds is even harder than doing so for domestic stocks. For example, you might want to find the best ETFs focused on Asia. Because of the antiquated architecture of existing fund screeners, it would take hours of work to pin down funds in the right fee range and with the right composition. Instead, Magnifi uses natural language search to immediately display and compare all the relevant funds for your query. For example, here are the results for searching “China Value Funds”.

Another great thing about Magnifi is that they incorporate FI360’s fiduciary risk score for every fund, allowing you to incorporate that element for clients and rest easy with concern to regulations.

FINSUM: In our view, Magnifi is the best way to search and filter investments, period. Once you try it out you will quickly move on from the many ETF “screeners” available.

(New York)

JP Morgan put out an interesting recommendation to investors recently. They said the best place to make money in the recovery might not be in the US, but rather in international stocks. According to Gabriela Santos, global market strategist at JP Morgan Asset Management, “When you have a cyclical recovery like we expect in 2021, it’s really international’s time to shine … We think it’s really important for investors to have a balance between U.S. equity exposure and international exposure as we go into the year of the vaccine for 2021”. The key argument here is that international indexes are more dominated by cyclical stocks than tech, and those are the share poised to really gain as the vaccine plays out.

FINSUM: This is all pretty basic. International indexes have not recovered as much as US stocks, and are composed of companies that are likely to start outperforming at this stage of the recovery. Europe in particular seems to be a good bet.

(New York)

New jobless data was released this morning and it took the market by surprise. Economists had been calling for new jobless claims to stay around the level of recent weeks—something around 695,00. But what happened was quite eye-opening: they came in at 853,000. The losses show that the economy is starting to feel renewed impacts of the surge in COVID cases. According to a job market expert, “Job destruction has not come to an end … We might be gaining jobs overall, but thousands of people are losing their jobs every week because demand has not returned”. Markets dipped on the release.

FINSUM: This is worrying for the economy. Hard to say if this trend will continue, but certainly not the direction markets have been predicting the economy would be heading.

(Washington)

Joe Biden and the Democrats’ plan for wealth management regulation is becoming clearer as his inauguration date draws nearer. One big question on the industry’s mind is whether Biden will completely replace Reg BI with an entirely new package. According to former SEC lawyers, that seems highly unlikely. The reason why is that doing so would take an act of Congress, a high bar. Rather, what seems much more likely is that a new SEC chief is appointed an enforcement is tightened very considerably, with the emphasis moving to strict “by the letter” enforcement rather than principles-based enforcement.

FINSUM: This would be a big change. One of the aspects that really set the Trump administration era of enforcement apart was that it would focused on following rules in principle more so that “to the letter”. While this was not unique to wealth management, it was a definite change of pace that now seems likely to reverse.

(London)

US market valuations are eye-watering. By several measures the S&P 500 is as richly valued as it has ever been. With that in mind, overseas stocks, especially in Europe, appear to be a good bet. For example, while US stocks are now well ahead of their pre-COVID peaks, the Stoxx Europe 600 is still down 9.2% since its high in February. Since March, the S&P 500 has rebounded by 60% while the Stoxx Europe 600 has only seen a 40% rise.

FINSUM: So European benchmarks are more exposed to the banks and industrials, which were more hurt by COVID than US tech companies, which dominate American benchmarks. That said, now that a vaccine is in site, there is a big chance for appreciation in Europe that seems much less likely to occur in the US.