(Beijing)

The US and China are currently in a hot-under-the-collar spat over trade. Each side is proposing to raise tariffs in response to the other, and there is no end in sight. Well, China may be changing gears and adding a new weapon—Yuan devaluation. Beijing is reportedly exploring how to use devaluation as a tool in a trade war. Weakening the Yuan would make Chinese goods cheaper to buy overseas and could be a tool to boost exports. At the same time, it makes it harder for Chinese companies to buy overseas goods.

FINSUM: While on paper it sounds promising, intentionally weakening the currency would give weight to claims (most loudly by Trump) that China is a currency manipulator, which could turn favor against Beijing.

(New York)

The actively managed ETF used to be a rare breed, and one that didn’t even make sense so long ago. However, with the rise of the asset class has come an explosion of variety, and especially, the overlaying of themes into ETFs. With all that said, the difficulty is choosing the best actively managed ETFs. Here are some to look at: Fidelity’s Total Bond fund, Davis Worldwide Select fund, Vanguard U.S. Multifactor, the iShares Russell 1000 Growth, JPMorgan Disciplined High Yield, iShares iBoxx $ High Yield Corporate Bond.

FINSUM: This is an interesting mix of funds, and most have expense ratios under 0.65%. Generally speaking, we like the idea of actively managed ETFs so long as the fees stay low.

(New York)

Can you remember any technology (maybe since the internet) that has had as much hype as artificial intelligence? Blockchain and Bitcoin come close, but other than that we cannot think of one. That said, advisors may be wondering how it is going to affect them. Well, Barron’s has published a long piece looking at how the technology will impact everything in wealth and asset management. Everything from portfolio optimization, to trade execution, to loss harvesting is being looked at through the lens of AI. Even securities selection itself is having AI applied to it through a number of techniques that all harvest big data on stocks.

FINSUM: AI has a lot of promise, not just hype. And from looking at how it might impact the sector, we don’t think the effects are going to be detrimental to human advisors, at least not in a major way.

(New York)

UBS has just launched its own robo advisor, which means that every wirehouse now has their own robo service. UBS’ new service caters to client with under $250,000 in their portfolio. The robo provides “risk assessment, online enrollment, regular monitoring for rebalancing, tax-loss harvesting functionality, and ongoing professional portfolio management aligned with UBS GWM CIO capital markets assumptions”. UBS joins Merrill Lynch’s robo launch a year ago, as well as Wells Fargo and Morgan Stanley’s platforms.

FINSUM: After all the fear and anxiety, robo advisors seem to have found a comfortable niche alongside human advice.

(Washington)

There is a lot of rhetoric out there about how the labor market is extremely tight, which will push wages up and force the Fed to raise rates. According to Barron’s, if you really compare this year’s labor market data versus last year, it looks like there is an unemployment pool of at least around 1 million Americans that could re-enter the labor force. This group is often referred to as the “hidden unemployed”.

FINSUM: This means that there is actually more capacity for the labor market absorb jobs than is often reported, meaning there may not be as much upward pressure on wages, and therefore, rates, as expected.