Anyone see the copy desk? It appears the definition of the fiduciary might be in for a rewrite, according to winkintel.com.

At this point, the Department of Labor needs to rewrite its fiduciary definition to all but make all first time advice fiduciary is just about the lone thing still on the table, analysts concur.

In that event, the alternation would pull weight and basically revert the DOL back to its maiden 2016 fiduciary rule, said Brad Campbell, partner at Faegre Drinker law firm. As it stands, the DOL’s package known as the investment advice rule makes rollover advice fiduciary, the site continued.

Valuable investment advice consists of two primary elements. One evolves around a new prohibited transaction exemption. Here, advisors can provide conflicted advice for commissions. The other is a reinstatement of the 1975 “live part test” in order to ascertain that which constitutes advice on investments.

Campbell noted the initiative’s “likely to be a very substantial proposal that will harken back to legal fights of 2016, which the DOL ultimately lost,” according to fa-mag.com.

The DOL, he continued, “is taking the position that fiduciary starts with the initial or rollover conversation. That's a pretty aggressive reinterpretation of what they historically had said, which frankly was ... that most rollovers were not fiduciary,”.

There is no question ESG strategies have seen their fair share of negative press lately, but a new deterrent for investors may lead to more pressure for some asset managers. According to a paper by André Wattø Sjuve, a scholar from the Norwegian School of Economics, ESG funds that charge higher fees are seeing outflows, while ESG funds that charge lower fees are seeing inflows. The study looked at the capital flow data of over 16,000 mutual funds during a period between August 2018 and September 2021. These findings indicate that investors are just as concerned over high fees with ESG funds as they are with other strategies. This doesn’t bode well for asset managers charging higher fees based on the massive demand for sustainable investing strategies. Sjuve believes a possible explanation for outflows out of expensive funds is that prices of ESG assets have risen substantially over the past few years and investors could be concerned about the prospects of future returns.

Finsum:As theprices of ESG assets skyrocket, investors are leaving higher fee ESG strategies for lower-cost funds.

Touchstone Investments, which is known for its Distinctively Active® funds, recently announced the launch of its fourth actively managed ETF, the Touchstone Ultra Short Income ETF (TUSI). The fund, which started trading on the Cboe BZX, seeks maximum total return consistent with the preservation of capital by primarily investing in a diversified portfolio of investment grade fixed income securities. Its portfolio is managed to maintain an effective duration of one year or less under normal market conditions. Managers for TUSI buy fixed-income securities believed to be attractively priced relative to the market or similar securities. The launch follows three actively managed ETFs launched during the summer including the Touchstone Strategic Income Opportunities ETF (SIO), the Touchstone US Large Cap Focused ETF (BZX), and the Touchstone Dividend Select ETF (DVND). Each ETF has a corresponding mutual fund that shares a similar investment strategy. All four ETFs are sub-advised by Fort Washington Investment Advisors. 

Finsum:Touchstone Investments recently launched the Touchstone Ultra Short Income ETF, its fourth actively managed ETF launch this summer.

According to Refinitiv Lipper’s fund flows, fixed income ETFs saw a net $4.5 billion in weekly outflows for the week ending on August 24th, 2022. This marked the group’s first weekly outflows in nine weeks. This also corresponded with bond ETF’s third straight week of average negative returns. The bond types with the largest outflows included corporate high yield ETFs with $3.0 billion in outflows, corporate investment grade ETFs with $733 million in outflows, and government Treasury ETFs with $570 million in weekly outflows. Corporate high yield ETFs had their eighth largest weekly outflows to date, while corporate investment grade ETFs saw their first week of outflows in eight weeks. However, not all fixed-income ETFs saw outflows. International & global debt ETFs saw $101 million in inflows and government mortgage ETFs saw $15 million in weekly inflows. Those were the only two fixed-income groups to report inflows.

Finsum:With fixed income ETFs seeing their third straight week of negative average returns, bond ETFs see their first outflows in nine weeks. 

Few probably are pounding away for a repeat performance of the bond markets in the first half of the year. But an upbeat perspective among investors is warranted, according to corporate.vanguard.com. And, why, pre tell, is that? Bonds are on the precipice to dispense a spike in real income and restart their role of diversifying portfolios.

Even so, however, the road ahead is sprinkled with a plethora uncertainties and variables. The upshot: among other things, for another season, inflation seems bound to remain abnormally high.

At the same time, unlike the recent past, corporates, municipals, high yield, and emerging markets pose plenty of chances for growth.

Bloomberg Barclay’s US Aggregate Bond Index plunged 8.8% since January, according to fidelity.com. That was its steepest drop off in 40 years. What’s up? Investor trepidations over rising interest rates and the fear it could put a dent in the price tag on bonds. That usually translates into a drop in bond prices and rising bond yields.

However, it also could be where opportunity knocks. The Fed’s plan to revert rates to “more historically normal levels” could tee up a chance in bonds for may of those with an eye on income, principle protection and diversification in the second half of the year and more.