Displaying items by tag: model portfolios

Franklin Templeton has partnered with Futu Securities International, a Hong Kong-regulated operation of digital brokerage Futu, to offer three risk-based model portfolios. The two companies have worked together since 2019 when Futu rolled out its mutual fund business to help expand its client base. The new model portfolios will help the China-based company strengthen its strategic relationship with Franklin Templeton. The model portfolios will have various risk levels to fulfill the client's needs and risk appetites. Futu is leading the brokerage industry in Hong Kong with a high market penetration rate. According to the company, its average user spends 1.5 hours per day on the Futubull app. The company also claims that its Hong Kong users accounted for more than 40% of Hong Kong’s adult population.

Finsum:Franklin Templeton is renewing its partnership with Hong Kong-based Futu Securities with the launch of three risk-based model portfolios.

Southeast Asian wealth manager StashAway and Blackrock announced that the two firms will partner to offer a suite of multi-asset model portfolios. The portfolios will be managed by StashAway and built using Blackrock’s analytics and ETFs. StashAway launched in 2017 with its own General Investing portfolios but has since expanded its offerings to include ESG investing, thematic portfolios, and cash growth. The new partnership will provide Asia-based investors access to BlackRock’s investment capabilities through StashAway’s platform. Investors will be able to choose from three investing strategies optimized for long-term risk-adjusted returns. StashAway’s General Investing portfolio optimizes for long-term risk-adjusted returns while keeping risks constant. Its Responsible Investing portfolio follows the same strategy but is also optimized for ESG impact. The third portfolio, which will be powered by BlackRock, is a long-term investment strategy offering broader diversification for investors.

Finsum:AsianDigital wealth managerStashAway has partnered with BlackRock to provide investors access to multi-asset portfolios built using Blackrock’s analytics and ETFs.

One of the most popular allocations for model portfolios in recent history has been the 60/40 model. A classic allocation with 60% invested in stocks and 40% invested in bonds. Until recently, this model has generated stable returns for investors. However, this year’s brutal returns for both the equity and fixed income markets have investors wondering if the traditional 60/40 model provides adequate protection. In most previous equity downturns, investors have been able to count on bond instruments to hedge negative equity performance due to an inverse relationship between stock returns and bond yields. But this year, investors have been faced with both a down stock market and a hawkish Fed, leading to losses in both asset classes. This has made the 60/40 model seem outdated as of late. While the 60/40 model may not be dead yet, investors may want to consider model portfolios with additional asset classes in the current market environment.

Finsum:With a down stock market and a hawkish Fed, investors may want to reconsider the 60/40 model portfolio.

According to a survey conducted by Schroder Investment Solutions, more financial advisors are outsourcing investment management to model portfolio services. The survey, which was conducted in May, suggested that the shift towards third-party portfolio management is continuing, with 17% of advisers stating that they have increased their use of outsourced solutions over the past twelve months. The number of advisers that reported outsourcing more than half of their client’s assets had risen from 21% in November to 31% in May. The factors influencing advisor outsourcing include, in order, access to investment expertise and resources, effective volatility management, spending more time with clients, and improved operational effectiveness. For some advisors, investment expertise in sustainable investing has led to outsourcing. Volatility management as a factor reflects an emphasis that advisors have placed on active management during the current market turmoil.

Finsum:Based on the results of a recent survey, more advisors are outsourcing investment management to third-party model portfolio providers due to their investment expertise and volatility management.

While model portfolios, of course, help pare down some of the labor inherent to the analysis of all investment positions, some advisors, nevertheless, outsource some – or all – of the investment management responsibilities by tapping third part model portfolios, according to flexshares.com.

Unlike funds, among other traditional investment vehicles, external solutions like third party portfolios provide financial advisors leeway over a gambit of aspects of managing a portfolio. They include  underlying holdings, asset allocation, rebalancing frequency, and trading.

“Advisors are typically seeking a holistic, cost-efficient, outcome-oriented solution from a trusted brand. Our models seek to provide a robust framework to navigate global markets and offer a straightforward means to help advisors build scale, enhance client service and satisfy regulatory expectations,” according to Melinda Mecca, director of Investment Solutions, Northern Trust Asset Management.

Also referred to by some RIA in the industry as the separately managed account, they’re used by investment advisors for accounts with higher AUM or asset under management, according to  synertree.io.

Now, trade and asset allocation decisions are beyond the wheelhouse of an RIA, but should have the chops to know the product without in extensive insight into each security within the model portfolio, the site continued.