Displaying items by tag: alts

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.

Despite intense geopolitical tension following U.S. and Iranian missile exchanges, gold prices have struggled to maintain momentum above $3,400 an ounce. Analysts attribute gold’s muted safe-haven response to the conflict’s regional containment and investor focus on broader market dynamics. 

UBS argues that gold’s value lies more in its role as a portfolio diversifier than a short-term geopolitical hedge, emphasizing its historical strength in times of uncertainty. According to the World Gold Council, central banks and portfolio managers rank gold highly for diversification, stability, and as a store of value—especially amid unpredictable U.S. policies under the Trump administration. 

UBS maintains a bullish $3,800 price target for gold, citing continued central bank and ETF demand, and also highlights high-yield corporate debt from gold miners as an underappreciated investment opportunity. 

Finsum: With mining companies showing strong balance sheets and free cash flow, M&A activity is expected to rise, offering investors alternative ways to gain from the sector’s resilience.

Edward Jones has expanded its separately managed account (SMA) offerings by adding 51 new strategies, bringing its total to around 120 as part of a broader effort to modernize and attract wealthier clients. 

These SMAs, overseen by third-party asset managers, offer financial advisors more flexibility and personalization options, with plans to grow the lineup to 300 by year-end. Roughly 8,800 of the firm’s 20,280 brokers currently use SMAs, which appeal to higher-net-worth clients due to benefits like tax efficiency and tailored portfolios. 

While Edward Jones doesn’t disclose specific SMA asset figures, about $860 billion of its $2.16 trillion in assets are held in advisory accounts. Edward Jones also introduced a proprietary SMA program last fall and continues to lower barriers for entry as SMA minimums become more accessible to a broader client base.

Finsum: These SMA offerings could be a game changer in the wealth management space. 

Once viewed as a fringe asset, bitcoin is rapidly gaining traction with Fortune 500 firms, many of which are now embracing it as a legitimate component of corporate finance. Major players like Strategy (formerly MicroStrategy) and GameStop have turned to convertible notes and other financing mechanisms to amass sizable bitcoin holdings, effectively using the asset as both a store of value and a treasury strategy. 

This shift has catalyzed the development of sophisticated instruments like structured notes—offering downside protection or leveraged upside—alongside Bitcoin-backed loans and custodial accounts with embedded yield features. While these tools may seem like responsible financial innovations, they walk a fine line between risk management and speculative engineering, especially as regulatory and accounting treatment remains murky. 

The entrance of mainstream institutions and the approval of spot bitcoin ETFs have brought new legitimacy, but corporate treasurers still face complex questions about liquidity, governance, and portfolio fit.

Finsum: Whether bitcoin serves as a smart hedge or a risky gamble depends on each company’s capital strategy, tolerance for volatility, and long-term vision.

Private credit has grown so large and intertwined with banks and insurers that it now poses a systemic risk in future financial crises, according to a new Moody’s Analytics study co-authored by economists and regulators. 

The report warns that the opaque nature of private credit and its deepening ties to traditional finance could amplify financial shocks due to increased interconnectedness. Since the 2008 crisis, banks have reduced lending amid tighter regulations, creating room for private credit funds—often lending to riskier, heavily indebted companies—to flourish with less oversight. 

Researchers used business development companies as a proxy for the sector and found their market behavior is now more correlated with broader financial stress than in the past. Although private credit firms argue they are less prone to panics due to their long-term investor base, banks are still deeply exposed through indirect relationships like fund financing and risk transfers. 

Finsum: While private markets tend to be insulated from recessions compared to their public counter parts it’s important to keep this risk in mind when investing