Displaying items by tag: models

Thursday, 13 January 2022 17:26

New Model Portfolios Giving Investors More Choices

Companies Newfound Research and Simplify Asset management are partnering on a selection of new model portfolios that are giving investors more options on their equity holdings. The structured alpha portfolios are designed to target different growth offerings and provide different risk exposure. With the four portfolios coming in 20/80, 40/60, 60/40, and 80/20 equity allocations investors will have exposure to equity, rate, and volatility markets to mitigate financial risk. Fund advisors are trying to get outperformance from strategic capital efficiency rather than trying to pick winning stocks at the right time.


FINSUM: Even basic equity/bond allocation strategies in model portfolios are a good way for advisors to drill down the risk in a portfolio.

Published in Wealth Management
Tuesday, 04 January 2022 10:11

Model Portfolios are Critical to ESG’s Rise

BlackRock shook up the investment world when he declared global capitalism would make it easier to find a green-way forward. However, it is black rocks model portfolios that really piloted the ESG plane. BlackRock inserted ESG right in the middle of the model portfolios which give many investors easier access to sustainability, and some became ESG investors without even trying to. This vision is what made ESG become the fastest growing investment trend by giving it to clients in a pre-packaged easy to invest format. However, ratings are suggesting some green-washing as 154 of the 155 companies in the S&P 500 don’t actually site emissions reductions as a factor, so BlackRock has crept in on owning lots of fossil-fuel guzzlers like Chevron and Exxon.


FINSUM: Biden admin might want to step up the regulation if it wants to hamstring the greenwashing on Wallstreet.

Published in Wealth Management

ARK Innovation is one of the leading model portfolios and has become a household name in the last year, but it looks like the bubble has finally popped or at least deflated. Huge losses in big holders like Zoom, Teladoc Health, and Roku are down over 30% and the only thing keeping the fund floating has been a stellar Tesla performance. This has many investors worried about the broader market because equity prices are inflated. Furthermore, the gap between large-cap growth stocks and smaller caps is as wide as it has been since 2000. Maybe this means an equity bubble could pop, but it could just mean small caps have more value now than ever.


FINSUM: High P/E ratios should have investors cautious at the very least. If the Fed threatens to huff and puff anymore the whole house could come down!

Published in Eq: Tech

Some trends were definitely starting to take hold in 2021, but those are going to continue to flourish in 2022. The first of which is an active fund take over, as it appears active fund starts will outpace passive funds and see huge inflows on top of it. The next biggest trend will be more RIA’s rolling up their proprietary model portfolios into ETF launches. These model-based funds are the best way for professionals to package their expertise and deliver it effectively to clients. A number of recent SEC policies make it easier for a variety of ETF launches to happen this year so expect this explosion to continue in 2022.


FINSUM: It makes sense that model portfolios will explode, firms can be more transparent about their areas of expertise by delivering them in fund form explicitly.

Published in Eq: Total Market
Wednesday, 15 December 2021 20:38

Model Portfolios Help Mitigate Client Stress

Model portfolios allow the feel of tailored experience with the ability to hit wider audiences by addressing the specific risks, features or scenarios investors are concerned about. WisdomTree has been a leader in model portfolio development by providing options across diverse assets such as equity, fixed-income, strategic multi-asset, growth oriented, and dividend options. On top of this they build out scenario focused funds.Their fixed income funds are focusing on shorter duration quality bonds while dipping into alternative credit. They have also developed a variety of international funds that focus on developing countries in order to meet the needs of investors worried the U.S. equity market is too overvalued.


FINSUM: Model portfolios are giving advisors a strong option for targeted concerns that face their clients like volatility and inflation.

Published in Wealth Management
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