Everyone is racing to develop and deliver a new ESG product, and annuities are just the latest on this trend. BlackRock is teaming up with RetireOne and Midland National to deliver an SG option for a Fixed Index Annuity. The index will seek to minimize its exposure to environmental risk and invest in companies with lower C02 emissions, better data privacy, and workforce diversity. ESG assets as a whole could make up 50% or more of assets under management by 2025 and this is an indication of how that trend is entering other industries. Disclosure and ESG risks are prominent considerations for many companies.

Finsum: This is a great option for investors wanting income and ESG to tackle two birds with one stone.

Charles Stanley is diving deeper into ESG with a new suite of model portfolios geared at responible passive investing. Jane Bansgrove will manage the model portfolios and is the investment director of Charles Stanley’s responsible investment committee. Studies have shown that many have put more emphasis on ESG and sustainability due to the Covid-19 pandemic. The funds will be available across different risk levels with different target growth rates that correspond to them. They are designed to be low cost and efficient like many other passive ESG funds.

Finsum: Model portfolios are a natural marriage with ESG, because thematic investing caters itself to a model that can make selections.

Growth and value don’t typically have strong co-movement with one and other unless its a total market rally, however JPMorgan’s Kolanovic is telling investors that forking central banks, rising commodities, and stock sell off are the catalyst for the bulls to move on value and growth. He told investors to construct a barbell portfolio with bio-tech tech and innovation pulling growth and metals and mining leading the way for value. Its the perfect swarm of macro factors that can elevate these markets. International growth stock have fallen so far they are beginning to show P/E ratios that look like value stocks and should intrigue investors. JPMorgan says the war in Ukraine could persist which will continue to elevate commodities.

Finsum: This is a great time for traditional energy, particularly for bond investors stuck in the cold.

Oil has been dominating headlines but natural gas prices skyrocketed to a t 13 year high on the back of Russia’s war on Ukraine. To add to the fodder temperature forecasts for spring are remarkably low which means homes will be utilizing more natural gas in order heat homes. Overall prices are $8.05 per million British thermal units and are up 108% through the year already. Financial markets aren’t sure this price increase is permanent and Citi has only raised their end price target to $4.60 by the end of 2022.

Finsum: Keep an eye on natural gas bonds as just like oil surging, it could mean good things for companies ability to repay.

It's never too early to begin thinking about tax-loss harvesting and there is a ripe situation in the bond market. The yield curve has been on the rise due to Fed tightening and inflation. Rising yields mean lower bond prices and ETF owners have taken a bath. Selling off those funds right now could give you a tax advantage later this year. However, investors should get out of the fixed income route altogether. Markets are beginning to show signs of a recession or straight volatility so replacing your bond ETF with another fixed-income ETF could help in the case of a recession. Or if bond prices begin to take off it's a good option to have some skin in the game.

Finsum: The wash rule makes harvesting losses in equity markets a bit difficult, but the plethora of bond funds and options gives investors better ability to harvest losses now.

Recent events have dramatically shifted the balance of supply and demand within the oil market, driving prices higher. Will this trend continue? 

Find out more. 

The bond market has taken a beating and investment-grade debt has been anything but a safe haven for income investors. This has been one of the third-worst stretches in history as the YTD returns have been -10.5% which is only bested by the Lehman collapse in late 2008 where returns crept to -14.3% and Volcker’s days of battling high inflation and hiking rates. Investors are selling off investment-grade debt as the risk-free rates on Treasuries are climbing as the Fed’s tightening cycle is beginning. These rising yields are all corporate bond ETFs and driving returns down, but things could get worse as rates will only continue to rise and inflation is only beginning.

Finsum: Income investors need to look to active funds or abroad if they want relief in the bond market.

Stagflation has been out of the public lexicon since the Greenspan era, but as inflation begins to gradually creep up again that word is beginning to seem like a higher probability. Inflation has climbed to 8.5% and growth is expected to slow dramatically for 2021Q1 to 1.7%. Small-cap is a great option during these times because they are a great alternative partially in Finance. Preferred Bank is a great option with earnings estimates rising and is moving into a bullish category on Wallstreet. Others to watch out for are Mercantile Bank Corp and Old Second Bancorp as they are also well-positioned small-cap financials to stave off stagflation.

Finsum: It's amazing that equities are the most stabilizing force on Wallstreet right now, but small-cap might just be the play as volatility rises.

President Biden announced he is going to nominate Michael Barr, former Assistant Secretary of the Treasury and current dean of the University of Michigan's Public Policy School, for the Feds Vice Chairman of Supervision. Previously nominated Sarah Bloom Raskin pulled her nomination with harsh criticism from Republicans because she argued the Fed should discourage lending to traditional energy companies. Barr will be stepping into a difficult role but has experience in Government. He helped create the Consumer Financial Protection Bureau. Critics have said that Barr had been easy on bank regulations during the Obama admin and others were suspicious as to his role with Lending Club and Ripple Labs.

Finsum: This is a relatively new position but it has critical regulatory power for the financial system.

Oil prices have begun to stagnate just a hair, but they are still high enough to spur lots of production. U.S. oil output is expected to be 12.86 million barrels a day according to East Daley Capital, which is a 23% increase from their December forecast. Most of the increased production will come from shale Fields in the Permian Basin, as elevated prices can sustain drilling and production here. Additionally, supply chains are relatively more lubricated, the Russia-Ukraine conflict looks ongoing, and a massive Covid resurgence seems like a small probability. The Dallas said profits are more than sustainable to continue drilling in the Permian Basin and other shale sites.

Finsum: This increased production could be enough to finally cap the upward moving gas prices, but that effect could take some time.