Displaying items by tag: portfolio management

Advisors today face increasing challenges in helping clients achieve and maintain financial independence. With high U.S. stock valuations predicting lower future returns, and bond yields offering minimal real returns, portfolio strategies need to evolve.

 Clients are also grappling with rising living costs, longer life spans, and elevated housing prices, creating greater financial strain. Factor investing offers a solution, selecting securities based on traits like momentum, quality, and low volatility, which have historically outperformed. 

These strategies can be implemented cost-effectively through ETFs and optimized for tax efficiency within households. Although no factor guarantees success in every market, a diversified approach to factor investing provides a long-term opportunity for outperformance.

Finsum: Factor investing is robust proven strategy that can bring legitacy to new advisors or those looking to expand client adoption. 

Model portfolios simplify portfolio management, allowing financial advisors to deliver customized investment strategies without starting from scratch. Leveraging technology, advisors can access high-quality, ready-made models that can be adjusted to meet specific client needs. 

Customizing these portfolios provides a balance between using institutional expertise and offering personalized service. Advanced analytics tools are seamlessly integrated, enabling advisors to filter, screen, and select the best-performing assets based on millions of data points.

Tracking performance over time with precision ensures that clients see accurate, realistic outcomes. This approach gives advisors a competitive edge, allowing them to scale their practice while maintaining individualized attention.

Finsum: Having the analytics at your fingertips can really aid in distilling complex information to clients.

Family offices are pivoting from conventional asset allocations towards a heavier focus on alternative investments like private equity, real estate, and venture capital. J.P. Morgan's recent report indicates that nearly half of these portfolios now consist of alternative assets, with larger family offices taking the lead in this shift. 

This approach is driven by the desire for higher returns, reduced volatility, and better alignment with long-term wealth preservation and growth goals. These offices are capitalizing on their ability to invest in illiquid assets, which offer the potential for higher returns over time.

 By engaging more directly in private companies, family offices are leveraging their entrepreneurial expertise to achieve greater alignment with their wealth preservation objectives. While traditional public markets still hold a portion of these portfolios, the emphasis is clearly shifting towards alternatives that can better meet the complex, multi-generational needs of these families.

Finsum: With macro volatility looming alts could offer more risk cover and should be heavily considered. 

As market volatility persists, major equity indexes hit new highs, prompting investors to shift from AI and technology stocks to small-caps. The Dow Jones rose 700 points on July 16, achieving a record high, while the S&P 500 followed suit, driven by interest rate cut hopes. 

Natixis Investment Managers advises using selective, active strategies and high-conviction portfolio construction to navigate market peaks. They recommend not waiting for stock declines, as equity markets historically increase 70% of the time. 

For an offensive strategy, focus on growth-oriented, small, and midcap stocks. Active management and model portfolios can help manage risks and optimize tax implications.

Finsum: Prepping your portfolio for the fall election is more crucial than ever. 

WisdomTree Inc. has launched Portfolio Solutions to help advisors create and manage client portfolios efficiently. With $109 billion in assets under management, WisdomTree offers three distinct services: portfolio consultations for advisor-built portfolios, CIO-managed model portfolios, and a shared CIO service for collaborative portfolio management. 

These services aim to streamline asset allocation, save time, and enhance advisor-client communication. Thomas Skrobe, head of product solutions at WisdomTree, emphasized the growth opportunities these services provide for advisors. 

The firm has seen significant adoption, with 2,000 U.S. advisors using WisdomTree managed models and aims to add 1,000 more by the end of the year.

Finsum: The new technology is abundant for portfolio construction, and advisors can lean on the analytics they provide to garner deeper insight.