The Pulse survey shows that advisors are shifting toward more flexible mandates, reducing allocations to core fixed income while increasing exposure to multisector fixed income and alternatives.  U.S. large-cap stocks—especially growth and blend styles—continued to dominate allocations, fueled in part by AI tailwinds and earnings strength. 

Active strategies also gained share, including active ETFs, which surged in usage over the past year. On the fixed-income side, core bond exposure was trimmed as advisors looked to diversify diversifiers like high yield, multi-sector, and credit-sensitive sectors. 

The average model portfolio holds around 16 distinct positions, and allocations to alternative strategies increased, with defined-outcome and multi-strategy mandates among the fastest-growing categories. 

Finsum: Advisors should look to factor portfolio tools to leverage in construction to better serve their clients’ needs. 

Stable value funds are a conservative investment option that aim to deliver higher returns than cash while preserving principal. They invest in high-quality bonds that are insured through contracts like guaranteed investment contracts or group annuities, which protect investors from losing money. 

These funds are available only in tax-advantaged retirement plans such as 401(k)s, and according to MetLife, more than 80% of defined contribution plans offer them. Stable value funds are often compared to money market funds, since both are designed for safety and stability. Over the 15 years ending March 2023, stable value funds delivered an annualized return of 2.99%, significantly higher than the 0.55% produced by money market funds. 

While money markets adjust quickly to interest rate changes, stable value funds respond more gradually, which can lead to short-term underperformance when rates are rising. Researching stable value funds involves looking at the fund’s goals, portfolio composition, fees, and historical performance.

Finsum: Advisors should also evaluate management tenure and ensure the fund’s returns align with its stated objectives for clients

While standard ETFs are built for long-term investors, more complex products like leveraged, inverse, and synthetic ETFs are designed for short-term or specialized strategies and carry higher risks. Leveraged ETFs amplify daily index returns, but compounding effects mean they often underperform over longer periods, making them unsuitable for buy-and-hold investors. 

Inverse ETFs, by contrast, rise when their benchmark falls and are typically used as temporary hedges against downturns rather than core holdings.

Synthetic ETFs take a different approach by using swap agreements with banks to replicate index performance instead of directly owning the securities, which reduces tracking error but introduces counterparty risk. These advanced products can be useful in the right hands, yet they require a clear understanding of their mechanics and limitations. 

Finsum: These tools can be tactical moves, not long-term wealth building, but serve short term client desires.

The U.S. stock market set new highs in Q3 2025, and while index funds largely outperformed, active funds were more mixed. Among the 10 largest active funds, only the JPMorgan Large Cap Growth Fund stood out, returning 9.3% and ranking in the top third of its category, while the Dodge & Cox Stock Fund lagged with just 3.2%. 

Index funds fared better, with the Vanguard Total Stock Market Index Fund delivering 8.2% and ranking highest among its peers, though the Vanguard Mid Cap Index Fund landed near the middle of its category.

Over the past three years, seven of the 10 largest active funds have outperformed their categories, led by two Capital Group funds that landed in the top decile of large-cap blend. Index funds also showed consistent strength, with S&P 500 trackers like Vanguard, Fidelity, and iShares ranking in the top quartile over that period. 

Finsum: Investors looking to capitalize on falling interest rates should look to large cap growth as they tend to be more interest rate sensitive.

Global real estate is shifting from traditional “visible” assets like office towers and shopping malls to “invisible” property such as data centers. These facilities have become essential infrastructure as cloud computing and AI workloads demand massive amounts of power, cooling, and networking. According to CBRE, 95% of major investors plan to boost their allocations to data centers in 2025, with many committing $500 million or more.

The surge in demand is driving enormous capital requirements, with hyperscale facilities costing billions to build. Boston Consulting Group estimates that $1.8 trillion will be needed globally by 2030 to keep pace with AI and cloud growth. 

Despite funding challenges, investors continue to reallocate away from conventional real estate sectors toward alternatives like data centers, battery storage, and related infrastructure. While construction costs and financing hurdles pose risks, institutional capital remains active, signaling that real estate’s future will be increasingly tied to digital infrastructure.

Finsum: Artificial intelligence may also reshape physical office demand as companies adjust headcount and space needs.

Assets under management is one way to value an advisory firm, but buyers also want stability, leadership depth, and client retention. Consultant Linda Bready, author of The Exit Equation, says successful sales depend on seven “pillars,” including clear exit goals, strong financials, next-generation leadership, scalable operations, client stability, effective technology, and reduced compliance risks. 

Buyers look for firms that can run smoothly without the founder and have systems in place to support future growth. To prepare, Bready advises advisors to organize their financials, document processes, and consider continuity beyond the founder. 

She also stresses the importance of knowing what life after the sale will look like, since that influences buyer fit. 

Finsum: Asking pointed questions of potential buyers and addressing risks upfront can strengthen both valuation and trust in the process.

The ETF market continues to expand as more firms convert mutual funds into ETFs, with a major asset manager completing the shift of its $1 billion unconstrained debt fund into the JPMorgan Flexible Debt ETF (JFLX). 

The fund charges 45 basis points and is designed to provide long-term total return through both current income and capital appreciation. JFLX has the flexibility to invest across a wide range of debt instruments, including bonds, loans, convertible securities, and money market holdings.

Its managers can actively adjust allocations across markets and sectors in response to changing conditions, positioning the fund as a versatile fixed income option. The move reflects rising investor interest in active, transparent ETF structures during periods of volatility. 

Finsum: With active ETFs adaptive strategies, these ETFs could serve as a core or complementary fixed income holding for investors.

Bond markets have been volatile lately, but some multisector bond funds have managed to deliver stronger returns than the broader bond market. These funds diversify across different fixed-income sectors, such as government, corporate, high-yield, and foreign bonds. 

Over the past year, the category has returned 5.93%, better than the Morningstar U.S. Core Bond Index’s 5.66%, and it has also outperformed over three- and five-year periods. A screen for the best performers by one-, three-, and five-year results highlighted three actively managed funds: Axonic Strategic Income Fund (AXSIX), DoubleLine Flexible Income Fund (DFFLX), and NYLI MacKay Strategic Bond Fund (MSYEX). 

Each has topped peers recently, with returns ranging from about 7% to nearly 8% over the last year. 

Finsum: For investors looking to reduce volatility while maintaining competitive returns, these funds show the potential benefits of a multisector approach.

Advisors are broadening portfolios beyond U.S. equities, with many now considering a more balanced fixed income allocation. 

Macroeconomic pressures, particularly uncertainty around the Federal Reserve’s next rate move, make diversification across bond sectors especially timely. Regardless of when rates shift, different areas of fixed income are likely to react in varied ways, underscoring the value of spreading exposure.

The American Century Multisector Income ETF (MUSI) offers an example of this approach, combining investment-grade and high-yield bonds, mortgage-backed securities, emerging market debt, and more. 

Finsum: Actively managed funds can adjust sector weightings to capitalize on opportunities while reducing reliance on any single bond segment.

Faith-based ETFs remain niche but are expanding, with six launching this year and total assets now around $10 billion. These funds aim to align investments with religious values, though many end up resembling S&P 500 trackers with higher fees. 

Currently, there are 46 such ETFs in the U.S., 38 Christian, seven Muslim, and one Jewish, which have attracted about $832 million in inflows year-to-date. Some apply strict screens, like the Inspire 100 ETF (BIBL), which excludes firms tied to abortion, LGBT activism, or gambling, while others, like SPUS, filter out half the S&P 500 for Sharia compliance. 

By contrast, funds such as the JLens 500 Jewish Advocacy US ETF (TOV) and the Global X Catholic Values ETF (CATH) closely resemble mainstream products like Vanguard’s VOO, differing mostly in expense ratios. 

Finsum: Advisors must weigh whether these products are genuinely value-aligned investments or simply pricier versions of broad index funds.