Last week, Charles Schwab announced the upcoming launch of the Schwab Municipal Bond ETF (SCMB). The ETF, which is expected to begin trading on October 12, will trade on the NYSE Arca. SCMB will have an expense ratio of only 0.03%, which will be much lower than comparable funds. The ETF will provide access to the broad U.S. investment grade, tax-exempt bond market. The fund’s goal is to track the total return of the ICE AMT-Free Core U.S. National Municipal Index, which measures the performance of the U.S. AMT-free municipal bond market. SCMB seeks to provide income exempt from federal taxes and is not subject to the federal alternative minimum tax. The ETF will have a high credit quality profile, investing only in investment-grade rated securities. John Sturiale, Head of Product Management and Innovation, Schwab Asset Management, stated, “As bond yields have risen, fixed income investing is more attractive than it has been in years, making this an opportune moment to introduce a new choice for investors seeking a low-cost, straightforward approach to income, diversification and risk management in their portfolios.”

Finsum: Charles Schwab is launching an ultra-low-cost Municipal bond ETF targeting investment-grade securities.

During recent testimony before the Senate Banking Committee, SEC Chair Gary Gensler told senators that the agency needs more resources for exams. He said the exam division’s “work is essential to ensuring strong compliance across the board,” including “work to test for compliance with Regulation Best Interest.” Gensler said the enforcement division “is doing more with less” and “more cases are being litigated and going to trial.” He also stated, “The SEC has tried the same number of cases to verdict in federal courts in FY22 (14) as we did in the prior three fiscal years combined.” For fiscal 2021, Gensler said the SEC received 46,000 tips, complaints, and referrals from the public. This was up from about 16,000 five years earlier. For the exam division, Gensler said the division exceeded the previous year’s numbers by completing more than 3,000 exams and the fiscal 2023 budget request supports an additional 4% increase in full-time examiners.

Finsum: In recent testimony, SEC Chair Gary Gensler asked the Senate for more funding for exams, including compliance with Reg BI.

It seems that during the past couple of years, ESG news has downright owned news cycles, according to mediablog.prnewswire.com.

In the course of that period, certain trends have reared their heads. With that in mind, as Q3 grinds to a conclusion, it appears that companies are fine tuning their messaging in a trio of ways as reflected In press releases PR Newswire received this month.

1. Avoiding the Appearance of Greenwashing

2. More Frequent, Detailed Progress Updates

3. Simplifying ESG

In time, it’s anticipated that there will be a further uptick in disclosures associated with the climate, according to indiacsr.in.

It will be associated with commitments internationally to, among other things, the EU’s proposed Corporate Sustainability Reporting Directive and the International Sustainability Standards Board.

From around the globe, top five ESG updates are:

1. Inflation Reduction Act – the most significant investment turned into law in the US

2. Climate-related shock is a severe financial risk

3. Allocation of the largest – ever corporate sustainability bond

4. New renewable energy goals for the city of Chicago

5. The world’s first 100% hydrogen-powered passenger train

Put it this way: research analysts and model portfolios don’t go hand in hand. Meaning, of course, an analyst can’t provide model services, according to cskruti.com. Nope. None. Nada.

"I have been asked this multiple times by the advisers and my answer has always been “NO!”

In other words: zip.

But why, you might ask. Well, no buy/sell recommendation in a specific security exists, the site continued. While advice on a “portfolio of securities” is covered under Investment Advisers Regulations, that’s not the case under research analyst regulations.

Those existing research analysts dispensing model portfolios must alter the product offering and discontinue offering portfolios. What’s more, when it comes to a specific security where clients can determine the action on a specific security, analysts are able to provide buy/sell recommendations.

Further driving home the point, based on the terms of a settlement order passed by the Securities and Exchange Board of India in May, sebi-registered research analysts are unable to offer either the portfolios or advisory services, according to livemont.com.

It’s expected the settlement will have reverberations on the platform Smallcase. It offers investors curated portfolios and was created by research analysts and investment advisors.

According to a recent report from Cerulli Associates, increased demand from financial advisors had led fund managers to include separately managed account (SMA) strategies into their model portfolios. Matt Apkarian, a senior analyst at Cerulli, told FundFire “Typically, model portfolios tap mutual funds and exchange-traded funds, but large asset managers are now seeing demand for SMAs, given their customization and tax-management capabilities.” According to FundFire, citing data from Cerulli, assets in model portfolios hit $2 trillion through the end of 2021. That was a 22% increase from the prior year. That included assets from home-office model portfolios and portfolios offered by asset managers, but excluded advisor-built model portfolios. Cerulli attributes the rise in assets to home offices directing their advisors to outsource investment management. The firm also believes that home offices will increase their model portfolio capabilities to compete with third-party strategists.

Finsum: SMA strategies are being incorporated into model portfolios as a result of advisor demand for more customization and tax management.