Tax-efficient investing is gaining momentum, with separately managed accounts (SMAs) emerging as a preferred tool for personalization and tax savings. Unlike mutual funds or ETFs, SMAs allow investors to directly own securities, enabling tailored strategies like tax-loss harvesting. 

Assets in tax-managed SMAs have surged past $500 billion, a 67% increase since 2022, with direct indexing leading the way due to its scalability and precision. Asset managers are now extending tax overlays to active equity strategies, though the process is more complex due to potential conflicts with managers’ top stock picks. 

Meanwhile, model portfolios are incorporating tax-aware transition tools to help advisors move clients into new strategies with minimal tax impact, further expanding the reach of tax management across investor segments.

Finsum: Fixed-income SMAs offer fewer tax opportunities but can still provide benefits during periods of rate volatility or credit stress.

Model portfolios have transformed from basic investment templates into versatile, sophisticated tools that support a wide range of advisor and client needs. Today, assets in model portfolios are projected to grow to $11 trillion by 2028, fueled by the rising demand for customization and outcome-oriented investment strategies. 

The most common models remain asset allocation portfolios, especially those built with open architecture, which allows advisors to incorporate both in-house and third-party managers for added diversification and cost efficiency. 

Alongside these, outcome-oriented models—such as those focused on income generation, downside protection, or tax optimization—are gaining popularity for their ability to align with specific client goals. Building block models, which emphasize a particular asset class or investment objective, also offer advisors greater control in tailoring portfolios around their core expertise. 

Finsum: As the model portfolio landscape matures, advisors are increasingly choosing providers that offer a full spectrum of solutions to enhance both operational efficiency and client personalization.

Semiliquid investment vehicles—including interval funds, tender-offer funds, nontraded REITs, and nontraded BDCs—are becoming a significant bridge between public and private markets, offering investors periodic liquidity and access to traditionally illiquid asset classes. 

These vehicles have grown rapidly, with U.S.-based semiliquid assets reaching $344 billion by the end of 2024, driven primarily by demand for private credit strategies that generate consistent income without necessitating frequent redemptions. However, their appeal comes with steep costs: average expense ratios exceed 3%, far above the fees of mutual funds and ETFs, and many carry layered management, incentive, and acquired fund fees that create high performance hurdles for investors. 

Leverage plays a substantial role in returns, particularly in credit-focused funds, where income appears more attributable to borrowed capital than superior asset selection. Semiliquid private equity vehicles, on the other hand, have largely underperformed, often failing to match the S&P 500. 

Finsum: These structures expand access to private markets, but investors must weigh the benefits of income and diversification against liquidity constraints.

Edward Jones has launched a new private client service, Edward Jones Generations, targeting individuals with at least $10 million in investable assets. This strategic shift marks a significant expansion beyond the firm’s traditional Main Street clientele, positioning it to compete more directly with established wealth management giants like Morgan Stanley and UBS. 

The new offering delivers a suite of high-touch services, including access to alternative investments, trust and estate planning, business succession strategies, and collaborative tax and legal advising with partners like EY and Husch Blackwell. 

In addition to personalized planning, clients will benefit from dedicated teams and access to lending, cash management, and sophisticated portfolio construction support. The move aligns with Edward Jones’s broader strategy to evolve its business model, including the promotion of team-based advising and a strong emphasis on advanced certifications like the CFP designation. 

Finsum: Be sure to think about how your firm can support the types of clients you are seeking.

Jefferies analysts are bullish on specialty engineering and construction (E&C) firms, arguing they are uniquely positioned to benefit from the ongoing surge in infrastructure spending. Key long-term drivers such as electrification, grid modernization, and expansion of gas midstream networks are fueling demand across the sector. 

Despite outperforming broader benchmarks this year—up 12.1% year-to-date versus 2.6% for the S&P 500—Jefferies believes the sector still has room to run. They cite robust tailwinds like increasing project backlogs, margin expansion, strong renewables demand, and a tightening skilled labor market. 

With forecasted EBITDA and EPS growth far outpacing that of the S&P 500, analysts see current valuation premiums as justified, reflecting a re-rating of the sector. 

Finsum: While potential changes to the Inflation Reduction Act pose a risk, expect larger firms to consolidate market share and emerge stronger.