Two strategists from Royce Investment Partners believe that now is the right time to consider small-cap stocks. In an article on Wealthmanagement.com, Francis Gannon and Steve Lipper gave six reasons why they believe the current environment is a great time to invest in small-cap stocks. The first reason is that small caps currently have superior valuations compared to large-cap stocks. Another reason to invest in small caps is the fact that small caps have a history of outperformance following periods of high investor anxiety and low-risk tolerance. Small caps have also historically beaten large caps following periods of deep declines. In addition, small caps operate in their own way; meaning there are significant differences between small and large caps in their long-term performance during different market cycles. Gannon and Lipper also mention that small caps are a highly heterogeneous asset class, indicating that there are so many small-cap companies that investors can find stocks in every sector and industry. The sixth and final reason is that investors lose out by waiting to put capital to work. They noted that small-cap recoveries have historically happened very quickly.

Finsum:Two strategists from Royce Investment Partners provide six compelling reasons why investors should consider small-cap stocks now.

Ethic, which is an ESG investing fintech that offers direct indexing to investment advisors, has raised $50m in a Series C funding round. Ethic is available to advisors that use the custody services of Fidelity, Charles Schwab, U.S. Bank, Northern Trust, Morgan Stanley, or Pershing. The company offers custom direct indexing portfolios that reflect a client’s values, financial goals, and tax preferences. The firm also offers impact reporting and educational materials. The asset manager, which focuses on socially responsible portfolios, currently has over $2 billion in assets. The latest funding round was led by Jordan Park Group. Other firms involved in the funding round include UBS’s venture arm, UBS Next, and existing investors such as Oak HC/FT, Nyca Partners, Sound Ventures, Urban Innovation Fund, and Kapor Capital. In an announcement, the firm stated that the new capital will “support Ethic’s ambitious growth plans, including expansion into new markets and products, and continued investments in its platform experience.”

Finsum:Direct indexing firm Ethic raised $50 million in a new funding round to expand into new markets and products.

A new insurance company plans on selling non-variable annuities directly to consumers. Former Global Bankers Insurance Group executives teamed up to start Pillar Life by forming Pillar Insurance LLC and using the entity to acquire Continental Life Insurance Company. Pillar Insurance renamed Continental Life to Pillar Life last year. The company plans on building a web-based self-service process by April 2023. The insurer has already posted guides to multi-year guaranteed annuity contracts and single-premium immediate annuities on its website. The Interstate Insurance Compact, which is an organization that helps states review product and rate filings, has approved Pillar Life forms for an SPIA contract and a single-premium deferred annuity contract. Pillar Life will also offer life insurance and supplemental health insurance products. For clients, this means they will have more ways to buy annuities on their own. For advisors, however, it will likely make it more difficult to go through the paperwork to find out what clients own.

Finsum:Pillar Life plans on offering non-variable annuities direct to consumers through a web-based self-service model.

Drop in the, um, bucket list? The performance of a number of model portfolios that leverage the bucket strategy recently was put under a microscope by Christine Benz, Morningstar’s director of personal finance, according to smartasset.com. While the year’s been unkind to the portfolios given their bottom line’s have taken a hit, nevertheless, they’ve outperformed the traditional 60/40 portfolio. That, of course, is an asset allocation retirees commonly use. Further, they’ve outpaced the S&P 500. Through the first six months of 2022, it was down – and by a considerable margin.

The strategy’s a way to spread your assets across different groups of investments that will be tapped at various points.

“[T]he Bucket system has delivered by keeping the faucets open,” Benz wrote. “Retirees using a Bucket system can draw upon their cash reserves without having to disrupt their long-term investments, which have likely experienced price declines so far this year.”

So, is the bucket list holding up in light of the difficulties of the year’s market performance? That would be a resound yes, as it does what it was designed to, according to Morningstar.com.

"True, all of my Model Bucket Portfolios have lost money this year -- and my guess is that most retiree bucketers are seeing red ink for the whole of their portfolios, too,” said Benz.  (As of late June, a 60% U.S. equity/40% bond portfolio would be down about 16% for the year to date.)

But the Bucket system has delivered by keeping the faucets open: Retirees using a Bucket system can draw upon their cash reserves without having to disrupt their long-term investments, which have likely experienced price declines so far this year.”

COVID was one thing, but what about reconfiguring the economic landscape?

Among treasurers, the escalating significance of ESG related objectives reflected exactly that, according to gfmag.com.

Today, companies are looking at pressure to adopt ESG principles from stakeholders squarely in the eye, the site continued. The consequence of not embracing, defining and delivering on those initiatives? Potentially allowing the competition to slip through its fingers. And that means more than a diminished reputation or the perception of failing to d the right thing. In the face of market volatility, investments and companies with ESG profiles that rock outdo others, studies show more and more.

Meantime, in light of an uptick in interest among investors in ESG topics, regulators have been burning the midnight oil to come up with consistency and transparency surrounding ESG claims, according to acacompliancegroup.com.

A gaggle of firms also are taking a swing at establishing themselves apart from their peers by committing to, for example, climate and sustainability. 

There will be an awareness of the surge in activity related to the FCA on ESG issues among firms with UK operations. Since the Taskforce on Climate-Related Financial Disclosures has come into effect during the past year, the FCA’s created a division to oversee ESG-related issues. It clarified its strategic direction and focus areas for ESG issues.

Tim Rowe, manager in the FCA’s Sustainable Finance Hub, noted that the FCA is laser focused on five “Ts” for its ESG strategy: transparency, trust, tools and transition.