Despite a down Q3, retail investors continue piling into fixed income ETFs, both long and short-duration. They don’t seem too fazed by the recent hawkishness from the Fed or recent calls for continued strength in yields. 

Last week, inflows into the most popular Treasury ETF - the iShares 20+ Year Treasury Bond ETF (TLT) reached its highest levels since March 2020. In Q3, TLT was down 13%. This turned a small yearly gain into a more than 10% decline. Despite this performance, TLT has had $4 billion of inflows in Q3 and has seen short interest decline as well. 

Clearly, retail investors have a contrarian bent as many strategists are calling for further weakness in bonds, and Fed fund futures markets increased their odds of further hikes while decreasing odds of cuts in 2024. 

Some of the inflows into fixed income may be due to concerns about equities and economic growth given recent soft labor and consumption data over the last few weeks. THerefore, they may be looking to take advantage of the highest yields in decades and the potential for price appreciation in the event of a recession or further cooling of inflation. 

Finsum: Fixed income ETFs are seeing continued inflows despite poor performance in Q3. Here are why retail investors may be buying the dip.

Eric Henderson, the president of Nationwide Financial’s annuity division, recently shared some thoughts on annuities and how it can help reduce financial stress for retirees. Henderson has been with the company for nearly 40 years and been instrumental in helping Nationwide’s annuity business grow to over $100 billion in assets. 

He believes that this is a great time for annuities given that short-term rates are above 5% in many instances. It’s been benefiting from volatility in fixed income and equities in addition to a cascade of uncertainties including inflation, monetary policy, recession risk, geopolitics, etc. 

Annuities can help investors side-step these risks while also taking advantage of historically high rates. So far, fixed annuities have seen the biggest increase in sales, but there has been strength in other types of annuities as interest and awareness grows.  

In terms of trends, Feldman sees more shorter-term, annuity products being introduced given the combination of uncertainty and increasing demand. Additionally, he sees the potential for ‘customized’ annuities that are created to fit an individual’s specific needs.   

Overall, he believes that at some point investors evolve from a ‘wealth accumulation mindset’ to focusing more on maximizing income. He believes this is the best time in decades for investors to build healthy income streams, and it also provides needed diversification given a shaky economic outlook. 

Finsum: Nationwide’s head of annuities, Eric Henderson, shared his thoughts on the category’s increase in popularity and some interesting trends. 

The power of – expansion.

That’s what Dimensional Fund Advisors is doing, expanding its exchange traded fund offerings with seven new ETFs, according to thinkadvisor.com.

They come onboard with the US Core Equity 1 ETF and upcoming launches of three global fixed income ETFs and a U.S. Large Cap Vector ETF, which were launched not long ago.

“We continue to evolve our investment offering to meet demand from financial professionals and add value,” Co-CEO and Chief Investment Officer Gerard O’Reilly said in a release. “These ETFs are another set of tools in Dimensional’s growing lineup, which we expect will meet diverse investor needs across asset classes and geographies.”

To build your own ETF portfolio – or discover a one ticket option – you might consider the MoneySense ETF finder tool, according to moneysense.ca.

For jacking up growth, investors can build a core portfolio and delve into other investing options. You can, say, pluck an investment in ETFs with themes. They might range from electric vehicles to artificial intelligence.

It can seem daunting, of course, to develop a brand from scratch, according to lpl.com. Whether it’s choosing a name to developing a personal logo, the reverberations of doing so endures. And that can be pretty intimidating.

When it comes to your financial practice -- your powers of creativity aside – methodical’s the name of the game. A few simple starter steps:

1. Define your value proposition

2. Pick your DBA name

3. Develop a logo

4. Develop a Website

5. Execute with Consistency

Then there’s the power of persuasion.

Want others to pick up on your professional and personal success? Well, you need to convince them to see your value, according to hbr.org.

These days, everyone – every where’s – a brand, and it’s paramount for your to develop yours and market it like doing so comes natural.

Personal branding’s intentional. It’s also a strategic practice where you define and spell out your personal value proposition. Now, there’s nothing new able carefully cultivating your public persona and reputation, the potential audience has significantly been expanded by online research and social media.

Model portfolios have been growing at a consistent rate for decades due to increasing adoption by younger advisors and more awareness among investors. Now, they have reached a size at which they are starting to affect markets especially when dealing with more illiquid securities. Currently, they collectively manage $3 trillion in assets under management (AUM).

It’s natural to consider the risks and opportunities as these ripple effects will only grow with model portfolios forecast to exceed $10 trillion in AUM over the next decade. In fact, recent unusual flows into various ETFs are often due to changes in the holdings of model portfolios.

Most model portfolios are constructed with ETFs. They are managed by investment teams of asset managers and can enable advisors to spend less time on portfolio management or security selection and more time on building their business and managing client relations. 

Since 2018, more than 400 model portfolio offerings have been launched. Most research shows that model portfolios tend to outperform advisor-managed portfolios. Ultimately, it’s an acknowledgement that beating the market is nearly impossible and that an advisors’ job is increasingly about financial planning rather than investing. 

Finsum: Model portfolio AUM is already in excess of $3 trillion. Here’s why the category is forecast to exceed $10 trillion over the next decade.