Displaying items by tag: model portfolio

BlackRock is increasing its bets on U.S. equities and artificial intelligence across its $185 billion model-portfolio platform, according to a new investment outlook. The firm shifted allocations away from international developed markets, leaving its models 2% overweight equities and triggering billions of dollars in ETF flows. 

The move reflects confidence in a rally that has pushed the S&P 500 to record highs this year, fueled by strong earnings, enthusiasm for AI, and expectations of Federal Reserve rate cuts. BlackRock pointed to U.S. corporate earnings growth of 11% since late 2024, far outpacing developed peers at under 2%. 

The firm also reallocated tech exposure, moving from a broad tech ETF into an AI-focused fund, which attracted nearly $1.4 billion in a single day. 

Finsum: As BlackRock put it, AI is both a growth driver and a defensive tool for portfolios.

Starting your own registered investment advisory (RIA) firm can be a rewarding move, especially amid a booming millennial client base and the $124 trillion wealth transfer underway. Advisors should begin by clarifying their personal and professional goals, then build a strong support team, including legal, compliance, tax, and marketing professionals, to ensure a smooth transition. 

It’s also essential to prioritize time wisely, balancing firm operations with client service and determining whether to outsource areas like investment management. Crafting an efficient tech stack is another foundational step, with core platforms for custody, CRM, portfolio management, and financial planning needed to streamline operations. 

Transitioning clients to the new firm must be handled carefully, ideally with legal guidance and a clear plan for targeting the ideal clientele. 

Finsum: With strategic planning and the right infrastructure, advisors can build scalable, client-centric RIAs ready to serve a changing generation of investors.

CAIS, a leading alternative investment platform for independent financial advisors, has launched CAIS Advisors, a registered investment advisor aimed at improving portfolio construction tools. Headed by Chief Investment Officer Neil Blundell, CAIS Advisors plans to offer advisory services and customizable alternative investment portfolios.

Blundell highlighted the challenges advisors face when integrating alternative investments into broader portfolios and emphasized how CAIS technology simplifies this process. The new division will also introduce multi-manager registered solutions, spanning private equity, real assets, and hedge funds.

 Additionally, CAIS will debut Compass, a tool designed to streamline portfolio construction using alternative investments. These launches were unveiled at the CAIS Alternative Investment Summit.

Finsum: Model portfolios and construction tools can greatly improve advisor effectiveness and efficiency. 

Portfolio construction is crucial for any investor, whether a beginner or experienced, as it helps balance risk and maximize returns. The key is to ensure each investment serves a specific purpose within the portfolio, rather than just collecting assets. 

Diversification, or spreading investments across different asset types, reduces risk by balancing higher-risk stocks with safer options like bonds. ETFs, particularly passive ones, offer a simple and cost-effective way to achieve diversification, providing exposure to a wide range of assets. 

Understanding your risk tolerance is vital, as it influences your portfolio's composition. Lastly, keeping long-term goals in mind is essential for managing both risk and return.

Finsum: Advisors could really benefit by integrating basic portfolio metrics into their calculations, such as Sharpe and Sortino ratios. 

Macro conditions are currently tumultuous, with inflation rates surprising on the low end and unemployment figures exceeding expectations. This uncertainty makes it a challenging time for investors, as the debate continues over whether positive news is beneficial for markets. 

U.S. equities are trading at high levels, prompting louder calls for caution and diversification. Asset managers, like BlackRock and State Street, are adjusting their model portfolio strategies, with BlackRock leaning into U.S. growth and quality fixed income, while State Street is increasing international equity exposure. 

These adjustments to model portfolios reflect a broader trend toward diversification amidst uncertain economic signals. As we move forward, monitoring these strategies can provide insights into navigating the market's complexities.

Finsum: As models recalibrate maybe its time to do the same in your own portfolio, but keep in mind this is a natural perk of active funds.