Wealth Management
Since 2012, high-yield income stocks and ETFs have declined in value as rising interest rates have made bonds, Treasury bills, and CDs more attractive. However, buying high-yield ETFs now could be advantageous if interest rates decline in the future. Notable high-yield options include the JPMorgan Equity Premium Income ETF (NYSE: JEPI) and the JPMorgan Nasdaq Equity Premium Income ETF (NASDAQ: JEPQ). Both ETFs use equity-linked notes (ELNs) tied to covered calls and have low expense ratios of 0.35%.
JEPI comprises 130 equities and routinely writes monthly calls on the S&P 500, yielding 7.5% annually. In contrast, JEPQ includes 98 equities and writes monthly calls on the Nasdaq-100, yielding 10.9% annually due to the Nasdaq 100’s higher volatility.
Both ETFs offer steady monthly payments that are higher and less volatile than those from other dividend-focused ETFs, despite limited gains in strong markets due to their covered call strategies.
Finsum: As interest rates fall underlying bond prices could help boost the performance of these funds.
Tiger Brokers, an online brokerage firm in Singapore, has introduced a new feature on its trading app aimed at providing a streamlined experience for high-net-worth clients interested in structured note products. Many investors are increasingly looking for alternative investments that can provide consistent and reliable cash flows.
However, traditional financial services often present barriers with high fees and substantial minimum investment requirements, making it challenging to access quality investment options. Tiger Brokers' Fixed Coupon Notes (FCN) remove these barriers by eliminating high purchase thresholds and the cumbersome, lengthy procedures associated with opening private bank accounts.
Their CEO, Ian Leong, reenforced their commitment to technology and improving the accessibility to investors.
Finsum: Many financial products were guarded from the general public, but technology is paving a way for accessibility
Bitcoin has experienced a decline, dropping about 9% from its recent high of over $71,000 to below $65,000. Barry Bannister, chief equity strategist at Stifel, suggests this might indicate an impending correction in the S&P 500.
Bitcoin's have been tightly related to the Nasdaq 100, which closely mirrors the S&P 500 with its top tech holdings. Bannister argues that Bitcoin's recent drop reflects uncertainty about the Federal Reserve's potential rate cuts amid ongoing inflation pressures.
Despite Bannister's caution, many strategists remain optimistic, raising stock market targets and betting on a soft economic landing. However, concerns persist about the market's narrow rally and the potential for future volatility as AI and other high-flying stocks continue to dominate.
Finsum: Many investors are putting buy on bitcoin, so the future is uncertain to say the least.
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The Bank of New York Mellon Corporation (BK) has introduced customized tax solutions and expanded its direct indexing suite, BNY Mellon Precision Direct Indexing. These offerings aim to help advisors align strategies with clients' investment goals, featuring tax transition management and tax overlay management through BNY Mellon Pershing X’s Wove platform.
Advisors can now manage portfolio migrations and apply ongoing tax overlay management to a customized set of assets. Stephanie Hill, head of Index at Mellon, emphasized that these enhancements aim to bring institutional-quality index management to retail investors in a tax-efficient manner.
This initiative complements BNY Mellon’s long-term growth strategy, which includes launching new services, digitizing operations, and strategic acquisitions. The company has recently formed significant partnerships and made strategic divestitures to strengthen its market position.
Finsum: Built in features to explicitly manage tax efficiency can help advisors leverage the full potential of this underused technology.
Ceramic studios have surged in popularity, offering a therapeutic alternative to digital interactions and fostering a sense of community. Places like Greenwich House Pottery (GHP) in New York have seen waiting lists grow significantly, highlighting the increased demand for hands-on creative activities.
This trend aligns with a broader wellness movement and the art world’s renewed interest in ceramics. Ceramic studios also serve as excellent networking hubs, bringing together diverse groups of people, from hobbyists to professional artists, all united by a shared passion.
Studios like GHP, think that a large majority of their clientele, nearly 80% are Lawyers, architects, doctors, retired curators, etc., so this leisurely activity could prove useful to also expand clientele and improve relationships.
Finsum: One trend we think we’ll see is that there will be some migration of business adjacent activity from places like golf courses and country clubs to a new generation’s idea of recreation.
Macro conditions are currently tumultuous, with inflation rates surprising on the low end and unemployment figures exceeding expectations. This uncertainty makes it a challenging time for investors, as the debate continues over whether positive news is beneficial for markets.
U.S. equities are trading at high levels, prompting louder calls for caution and diversification. Asset managers, like BlackRock and State Street, are adjusting their model portfolio strategies, with BlackRock leaning into U.S. growth and quality fixed income, while State Street is increasing international equity exposure.
These adjustments to model portfolios reflect a broader trend toward diversification amidst uncertain economic signals. As we move forward, monitoring these strategies can provide insights into navigating the market's complexities.
Finsum: As models recalibrate maybe its time to do the same in your own portfolio, but keep in mind this is a natural perk of active funds.