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Another post pandemic super bill is flowing through the economy this time with a Biden name tag, and the president claims the $1.2 trillion dollar stimulus will lower inflation. The idea is the new bill will lubricate the American supply chains and have goods flowing easier and thus lowering costs. It's difficult to say if this bill will un-kink the supply chains or just boost demand and prices even more. Americans are already worried about $4.50 gass and surging food prices. Inflation hit a 31 year record this month, and inflation expectations aren’t slowing according to the Michigan survey of consumer expectations. The median projection is 4.6% over the next year, up nearly 2% from a year ago. Additionally the Biden administration is planning on pushing the $1.75 trillion dollar Build Back Better in the upcoming weeks.
FINSUM: A stimulus bill would have to be hyper targeted at supply chains to have the effect Biden is aiming at, and in combination with the BBB these bills will only further the U.S.’s inflation problem.
Envestnet’s CEO told investors that it oversees $49 billion in direct investing assets and that they see this number going higher in the future. Direct investing is a part of a growth area for the company along with other personalized portfolios, tax overlays, and ESG and impact investing. Direct indexing allows investors to hold the underlying assets and then add or drop stocks for offsetting tax purposes or to hit other financial objectives. Other giants in the financial industry such as Vanguard and Franklin Templeton have acquired direct indexing portfolios and many firms are ramping up competition in this space.
FINSUM: Direct investing makes a lot of sense over traditional hard indexing because of the customization and tailoring to your financial needs, but it does usually come at the cost of higher fees.
Value has outperformed the market tremendously for a portion of this year and value managers must be starting to get a little of that old feeling back...see the full story on our partner's site
2021 has posed its fair share of risks to the average portfolio: emerging market disruption, Covid-19 resurgence, slowing economic growth, and rising inflation. However, model portfolios are the solution advisors can utilize to mitigate this risk. Often sought after for their ability for advisors to utilize in order to spend time deepening relationships with clients, a suite of model portfolios have popped up targeted to mitigate risks. For example, EQM Capital launched a variety of modular model portfolios that are risk-based ETFs to better suit clients’ portfolio objectives and preferences.
FINSUM: Model portfolios are expanding and changing in a variety of ways, and this means they can better suit their clients whether that's for their risk level or ESG expansion.