Potomac Fund Management’s model portfolios are reaching a larger audience as its strategies are now available on the FMAX and Amplify platforms. FMAX stands for Fidelity’s Managed Account Xchange, which is an investment platform that connects advisors to portfolio construction solutions. Amplify is another wealth management platform that provides advisors with portfolio and client solutions. This follows a recent announcement by the company that its strategies had launched on the Orion Portfolio Solutions platform. The demand for strategy diversification has skyrocketed as advisors deal with the current bear market. The downturn has led advisors to embrace multiple strategies to build and preserve wealth for their clients. Potomac’s strategies are designed to “win by losing less” which may help financial advisors build portfolios to help protect against market risk. The company’s suite of model portfolios allows advisors to match the right strategy to each investor’s needs.

Finsum: Potomac Fund Management’s model portfolios, which help advisors diversify against market risk, are now available on more platforms.

The rumble for a trend called direct indexing seems to be accelerating, as a burgeoning number of investors are displaying a demand for specialized portfolios, according to markettradingessentials.com.

The upshot: eschewing ownership of a mutual or exchange traded fund, direct indexing’s flashing the wallet on stocks of an index, the site continued. The idea’s to hit to hit paydirt on, for example, tax efficiency, diversification or values-based investing.

“It says a lot that these large fund providers are leaning into direct indexing,” said Adam Grealish, head of investments at Altruist, an advisor platform with a direct indexing product.

So, in light of the ascension of direct indexing, investors might be asking, pre tell, how to build a portfolio in which this strategy’s incorporated, according to corporate.vanguard.com.

Well, presto, investors can cull ways to meet that goal through a framework available in Personalized indexing: A portfolio construction plan, a Vanguard research paper recently published. 

“Our research represents a sensible starting point for potential direct indexing investors who want to include this strategy in their portfolios,” said Vanguard senior investment strategist Kevin Khang, Ph.D., one of the paper’s authors.

With apparent eroding client interest, ESGs might be losing some of their bang, according to thinkadvisor.com. In the past several months, 31% of advisors reported taking questions about ESG or socially responsible investing from clients. That’s down from 39% who indicated as much last year and in 2020.

Thirty four percent of advisors were found to tap or recommend these strategies to clients this year,  according to the survey. While that’s an uptick of 2 percentage points from 2021, it receded from a high of 38% in 2020.

Investmentnews.com reported in June that, in recent years, while a burgeoning percentage of financial advisors folded ESG investments options into their business, more now indicated they intend shore back on suggesting such investments, according to a survey.

While financial advisor use or recommendation of environmental, social and governance or ESG investing strategies have moved consistently along over the past four years, according to prnewswire.com. However, during the next  12 months, it could slip in use, according to the 2022 Trends in Investing Survey, conducted by the Journal of Financial Planning and the Financial Planning Association, as provided to prnewswire.com by the Financial Planning Association.

Made up of a diversified group of assets built to generate an expected return, model portfolios also come with risk, according to smartasset.com.

With your financial goals squarely in the cross hairs, a host of portfolios typically are offered by financial advisors or investment managers. With these portfolios, investors can leverage simple and effective investment methods under minimal management, the site continued. 

Certainly, it seems, the popularity of model portfolios is hardly lukewarm. Within the landscape of the financial product distribution landscape, among advisors, their burgeoning use carries formidable power, according to brainbridge.com.

These portfolios, over time, are automatically rebalanced based on evolving market conditions or client needs. According to MMI, these models always have been a linchpin of the $6.5 trillion advisory solutions industry. Most prominently, they’ve played a big role in packaged mutual fund advisory programs, the site stated. That’s where discretionary investment management is outsourced by an advisor to an internal investment committee/research team at a distributor.

Creating the portfolio evolves around a plethora of decisions, according to forbes.com.

Through diversification, a model portfolio positions you to hedge your risks.  

In an ideal world, the brains behind the portfolios are financial advisors. Their role’s to oversee the portfolios daily, allowing you, the customer, to be hands off.

PIMCO saw the second quarter sell-off in bond funds as investors pulled nearly $30 billion in the last three months. The biggest cause for the sell-off is the rising rate hikes and inflation which may be causing yields to rise and bond prices to fall. Still, analysts say that if interest hikes begin to stabilize then the bond outflows will seize and even reverse into inflows. 

This is the largest sell-off since the start of the pandemic, and investors are concerned a recession is around the corner. PIMCOs shining light are the few funds that it has that are doing okay despite macro headwinds and could prove to be a driving force for inflows when markets stabilize.

Finsum: Bond prices are just too low right now and yields will fall with inflation easing and the fed tightening, but its a matter of it happening soon enough.