Wealth Management
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.
Sip and paint parties have become a popular social activity, combining the enjoyment of painting with the relaxation of sipping wine. These events, often hosted in studios or bars, provide all necessary art supplies and a professional instructor to guide participants through creating their own masterpiece.
The casual, fun atmosphere makes them appealing for people of all skill levels, from beginners to seasoned artists. Beyond creativity, sip and paint parties are great for socializing, offering a unique way to connect with friends or meet new people. They also can be hosted by local artists to get in touch with a different aspect of the community.
This trend is also seen as a wellness activity, promoting stress relief and mindfulness. With their growing popularity, sip and paint parties have become a favorite for celebrations, corporate team-building events, and novel nights out.
Finsum: This is one of the trendiest ways to engage with the artistic side, but also give wine collectors a chance to dip into their cellar.
Tax, trust, and estate planning are in high demand ahead of a likely reduction to the estate and gift tax exemption in 2026. Surveys of over 2,000 financial professionals revealed that only 13% felt very confident about tax planning strategies, and just one in twenty felt confident with estate planning.
Visual aids can bridge this knowledge gap by making complex concepts more understandable, thus increasing confidence among clients and advisors. Nearly four out of five respondents reported improved confidence in tax planning after webinars that used visual examples.
Using practical examples and visual aids helps financial professionals recall information better and feel more confident discussing these strategies. This increased confidence may lead advisors to proactively bring up and explain complex planning strategies to their clients.
Finsum: Even just breaking the pace of complex information with graphical storytelling can boost client confidence and attention.
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BlackRock has created two actively managed ETFs: the BlackRock Long-Term U.S. Equity ETF (BELT) and the BlackRock High Yield ETF (BRHY), focusing on ‘high-conviction’ stocks and below-investment-grade bonds, respectively.
This introduction responds to the growing investor interest in active ETFs, which seek to outperform market benchmarks. Managed by the same professionals who handle similar mutual funds at BlackRock, these ETFs add to the firm's expanding lineup of active products.
Despite their higher fees compared to passive index funds, active ETFs like these are gaining traction among investors willing to pay more for potential market-beating returns. BlackRock's active ETF assets in the U.S. have now reached $25 billion, highlighting a significant trend in the asset management industry.
Finsum: Its critical to consider timing when picking between active and passive ETFs and the potential sources of volatility.
Buffer ETFs have grown rapidly since 2018, now totaling 159 with nearly $38 billion in assets. They attract financial advisors by offering downside protection for the first 10% to 15% of losses while allowing market gains, making them popular during volatile periods like 2022.
Experts point out that these ETFs are easier to rebalance and offer daily liquidity compared to structured notes and annuities. However, buffer ETFs cap potential gains, limiting profits when the market rises, and their performance can be affected by market timing.
They typically have a defined 12-month outcome period, and buying or selling mid-series can negate initial protections and caps. Despite their benefits, buffer ETFs have higher fees and might not pay dividends, making them less suitable for long-term investors compared to direct equity investments.
Finsum: Sometimes it’s worth paying higher fees or sacrificing a little alpha to hedge some volatility
While you’ll find salespeople peddling the pros of annuities littered across the industry and their detractors in equal force, but in reality, index annuities, under specific circumstances, can be a viable option for a steady retirement income. Here are three top providers:
- MassMutual stands out as the top annuity provider with high ratings and a broad range of annuity types, making it a reliable choice for straightforward annuity products.
- Athene, known for its no-charge income and death benefit riders, offers a variety of annuities, including fixed and index-based options, suitable for those seeking guaranteed retirement income.
- Fidelity Investments, partnering with several insurance companies, provides a wide range of annuities and offers the Fidelity Personal Retirement Annuity, notable for its low fees and no surrender charges.
Each of these companies caters to different investor needs, from those desiring straightforward solutions to those looking for comprehensive investment and annuity integration.
Finsum: Index annuities in particular can be a goldilocks solution to income investments during higher volatility.